Income Tax Deductions
Home Mortgage Interest
Also see our FAQs
on Home Mortgage Interest Deduction
Home mortgage interest and points are generally reported to you
on Mortgage Interest Statement Form 1098 by the financial
institution to which you made the payments.
If all of your mortgages fit into one or more of the following
three categories at all times during the year, you can deduct all
of the interest on these mortgages:
- Mortgages you took out on or before October 13, 1987, called
grandfathered debt
- Mortgages you took out after October 13, 1987,
to buy, build, or improve your home, but only if these mortgages
plus any grandfathered debt totaled $1 million or less throughout
2004. The limit is $500,000 if you are married filing separately
- Mortgages
you took out after October 13, 1987, other than to buy, build,
or improve your home, but only if these mortgages totaled $100,000
or less throughout 2004, and all mortgages on the home totaled
no more than its fair market value. The limit is $50,000 if you
are married filing separately.
If one or more of your mortgages does not fit into any of these
categories (and for details regarding second homes), see IRS
Publication 936: Home Mortgage Interest Deduction (PDF 139kb),
to figure the amount of interest you can deduct. If you can deduct
all of the interest on your mortgages, you may be able to deduct
all of the points paid on the mortgage as well. For information
on deducting points, see Income
Tax Deductions: Home Mortgage Points.
You may be able to take a credit against your federal income tax
if you were issued a mortgage credit certificate by a state or
local government for low income housing. Use Form 8396, Mortgage
Interest Credit, to figure the amount.
Note: you may be subject to a limit (phaseout)
on some of your itemized deductions including mortgage interest.
For 2004, this limit applied if your adjusted gross income was
more than $142,700, or $71,350 if you were married filing separately.
The information provided in this website is
not legal advice and should not be interpreted as legal advice.
This website is intended to provide a basic understanding of this
information in summary form. This information may not be comprehensive,
is subject to change, and may not apply to all individual circumstances.
Any information received here should be confirmed with the appropriate
government agencies or with an attorney, particularly as it relates
to your individual circumstances. Your use of this website indicates
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