Limits on Your Mortgage Interest Tax Deduction

One of the benefits of financing your home purchase is you can write off you mortgage interest that is paid. Most people believe there is no limitation on this deduction, but there really is. First off, the deduction can only be taken on the mortgage for the home you actually live in. Second, you can’t deduct interest applicable to any loan amount above 1 million dollars. Third, you can’t deduct any interest paid on a equity loan for an amount exceeding $100,000. It goes without saying that tax law changes all the time, so make sure to speak with your tax professional regarding the latest rules. The above also only applies to federal taxes, not state.