This video was published by the IRS.
Do you have a mortgage or home equity loan? If so, you need to know that tax reform changes affect the tax deduction for mortgage interest.
The first change is you can deduct interest only for loans that were used to buy, build, or substantially improve your main home, or a second home. That means interest paid on some home equity loans is not deductible. For example, if you used the loan proceeds to buy a car, pay credit card bills, or some other purpose, you cannot deduct interest paid in 2018.
The second change applies to loans that were originated after December 15, 2017. You can now only deduct interest paid on the first $750k of these loans, or $375k if you are married filing separately. If you refinance your loan after December 15, 2017, there’s some special rules that may let you deduct interest paid on the full amount you refinanced.
To learn more, visit IRS.gov and check out Publication 956. Remember, to deduct your mortgage interest, you must itemize your deductions. Tax reform boosted the standard deduction for most people. That means that for many people, the standard deduction will be a better deal than itemizing.
To learn more about this and other tax reform changes, visit www.irs.gov/taxreform.