Due to the Tax Cuts and Jobs Act, the amount you are able to claim for the mortgage interest deduction has been reduced.
What is the limit?
- If you purchased your home after December 16, 2017, then the IRS limits the mortgage interest deduction for any mortgage debt exceeding $750,000 ($350,000 for married filing separate).
- A higher allowance of $1,000,000 ($500,000 for married filing separate) applies if your home purchase and mortgage indebtedness occurred before December 16, 2017.
What if I am over the limit?
If your total mortgage debt for the tax year exceeds these amounts, the amount you are allowed to claim is limited. You will need to complete this IRS Qualified Loan Limit Worksheet before reporting the mortgage interest deduction in the 1098 program entry.
What if I own more than one main home during the year?
If you sell your main home and purchase a new one, the limit applies for the total amount of both mortgages combined.
This information and IRS limitation can be further reviewed in IRS Publication 936.