Is my mortgage interest still deductible?

While many people continue to enjoy the benefits of increased take-home pay due to the Tax Cuts and Jobs Act (TCJA), understanding how the Act affects mortgage interest deductions remains crucial. The TCJA increased the standard deduction, which has eliminated the need to itemize deductions, including mortgage interest, for many taxpayers. However, if your total itemized deductions exceed the standard deduction amount ($13,850 for individuals and $27,700 for married couples filing jointly for 2024), it's essential to understand what is allowable under the current rules. Here is a summary:
​

1. Mortgages Originated Before January 1, 2018: If your home loan was originated before January 1, 2018, and the loan was taken out to acquire, construct, or substantially improve the home, the interest remains deductible under the original terms.
2. Home Equity Loans: Interest paid on Home Equity Loans is generally not deductible unless the loan is used specifically to buy, build, or substantially improve the home that secures the loan.
3. Refinancing: Interest on a mortgage taken out to refinance a previous loan remains deductible only up to the amount of the original mortgage principal, provided the refinancing is used to acquire, construct, or substantially improve the home.
4. Deduction Limit: The maximum mortgage amount on which interest can be deducted is $750,000 for loans taken out after December 15, 2017. For married taxpayers filing separately, the limit is $375,000.
5. Multiple Properties: If you own more than one home (e.g., a lake home, ski home, country cabin, etc.), only the interest on two homes can be deducted. For example, if you have a primary residence with a mortgage and a second home with a mortgage, and a third home with a mortgage, you can only count two of the properties as eligible for interest deduction. The properties selected can change from year to year, allowing a homeowner to choose the home loan with the highest interest rate to deduct.

​While this is not a comprehensive list of all changes, it should provide guidance in making decisions about refinancing or purchasing a home. There are various methods for calculating allowable deductions, so consulting a tax professional for specific advice regarding your situation is advisable.