Is Home Equity Loan Interest Tax Deductible

15 2017 you can deduct interest on 1 million worth of qualified loans for married couples and 500000 for those filing separately for the 2018 tax year.

Is home equity loan interest tax deductible. Is it possible to get a tax deduction on your home equity loan. But with the tax reform brought on by president trumps tax cuts and jobs act tcja a lot of homeowners are struggling to work out whether they can still take a home equity loan tax deduction. Despite the provisions of the tax cut and jobs act the irs in a 2018 advisory states that home equity loan interest is still deductible as is interest on helocs and second mortgages. Home equity loan interest is tax deductible if your mortgage debt is within government limits and the borrowed money was used to buy build or improve your home.

The tax cuts and jobs act of 2017 enacted dec. Interest on home equity loans has traditionally been fully tax deductible. 2017 tax law changes whether interest on any kind of heloc or home equity loan is tax deductible depends on how you are spending the loan funds. If you took on the debt before dec.

Under the new tax bill this deduction is a thing of past. If you take out a home equity loan your interest payments may qualify for a deduction in addition to your mortgage interest. 22 suspends from 2018 until 2026 the deduction for interest paid on home equity loans and lines of credit unless they are used to buy build or substantially improve the taxpayers home that secures the loan. In the past homeowners who took out home equity loans were able to deduct the loans interest up to 100000 from their taxes.

Home equity loan interest. However if the taxpayer used the home equity loan proceeds for personal expenses such as paying off student loans and credit cards then the interest on the home equity loan would not be deductible.