Tax Resources
 

Mortgage Interest Tax Deductions

Taxpayers can usually claim mortgage interest tax deductions. Below are some home mortgage interest deductions tips to help taxpayers determine if they can take any home mortgage interest deductions. 

What is a home mortgage interest for tax purposes?

A home mortgage interest is any interest a taxpayer pays on a loan secured by his or her primary residential home or second home. A home mortgage interest can be:

  • a first mortgage

     

  • as second mortgage

     

  • a line of credit

     

  • a home equity loan
What are the requirements for deducting home mortgage interest?

In order to qualify to deduct home mortgage interest, the following tests for mortgage interest tax deductions must be met.

  • The taxpayer must file the IRS tax form 1040 and itemized deductions on Schedule A of the Form 1040.

     

  • The taxpayer must be legally liable for the home mortgage loan. In another word, if the mortgage is someone else's mortgage then the taxpayer cannot claim any mortgage interest tax deductions on that mortgage. There also must be a true creditor and debtor relationship on the mortgage so the lender will want to be repaid and the borrower (taxpayer) will have to be liable to pay the loan off.
What type of mortgage interest qualifies for the mortgage interest tax deductions?

The mortgage that qualifies for the mortgage interest tax deductions must e a secured debt on a qualified home such that the taxpayer who is claiming the mortgage interest tax deductions has an ownership interest.

A home is a qualified home by the tax laws if it is either the main home of the taxpayer or the second home.

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