Does home mortgage interest matter anymore? We have all heard that fewer people will itemize their deductions for 2018. But, did you realize that those that still itemize will get less deductions? Yes, it was well publicized that the amount of state and local taxes that can be deducted is now limited to $10,000.  Less well known is that interest paid on home acquisition debt that exceeds $750,000 will be limited. However, preexisting home mortgage loans are grandfathered in. Also, no interest deduction is allowed for home equity loans that are not used to buy, build, or improve the home.

The tax treatment of points has not change. Points paid on loans to buy, build, or improve your primary house are still deductible in the year that you pay them. Refinanced loan closing costs are deducted ratable over the life of the loan. The pay-off of a refi loan or the refinancing of the loan (from a different lender) allows you to write off the remaining balance of the original points. This also occurs when your home is sold. If applicable, remember to take this write-off when you sell your home.

Home Sweet Home: Not the Tax Haven it used to be.

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