Q: I recently purchased my first property. My concern is: Will the home mortgage interest deduction (MID) still be available for use? –Roberto
A: As you know, homeowners are currently able to deduct the interest they pay on their mortgages, by and large — the tax code also authorizes homeowners to deduct their property taxes.
To take the deduction, you have to itemize your tax return, and it turns out that for some homeowners, the standard deduction is actually larger than what they pay in property taxes and mortgage interest, so those homeowners take the standard deduction. Additional restrictions on the deduction as it currently stands include that:
- It applies only to the first $1 million of mortgage debt used to buy or fix up a home;
- It applies only to mortgage debt on a primary or second home; and
- It applies only to the first $100,000 in home equity debt — no matter what the debt was used for.