Chris Day

Tip – Mortgage Interest Deduction- Is it still as good as it used to be?

Mortgage interest deduction circled notebook reminder for tax preparation and savings.

The mortgage interest deduction can be a benefit for tax purposes for many homeowners. It allows taxpayers to deduct the interest paid on a mortgage used to buy, build, or improve a home, reducing their taxable income.  Unfortunately, the mortgage interest deduction (MID) and its associated tax benefits are not as advantageous for some homeowners as they used to be. Several changes, particularly those brought by the Tax Cuts and Jobs Act (TCJA) of 2017, have reduced its impact. Here’s why:

1. Increased Standard Deduction


2. Reduced Loan Limits


3. State and Local Tax (SALT) Deduction Cap


4. Alternative Minimum Tax (AMT)


Net Impact


Does It Still Have Value?

Yes, for those with larger mortgages or higher itemized deductions, the MID can still result in meaningful tax savings. However, its value has diminished for many middle-income taxpayers due to the higher standard deduction and other limitations.

If you’re unsure whether the mortgage interest deduction benefits you, consulting a tax professional or running a comparison of itemized vs. standard deductions is a good idea.

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