Is Home Equity Loan Interest Tax Deductible

Under the new tax bill this deduction is a thing of past.

Is home equity loan interest tax deductible. 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. 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. If you take out a home equity loan your interest payments may qualify for a deduction in addition to your mortgage interest. 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.

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. Interest on home equity loans has traditionally been fully 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. 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. Californians feared the new tax law the tax cuts and jobs act of 2017 enacted last december would completely screw those counting on deducting interest from home equity loans and lines of. Is it possible to get a tax deduction on your home equity loan. In the past homeowners who took out home equity loans were able to deduct the loans interest up to 100000 from their taxes.

Beginning in 2018 only the amount that is used to buy build or improve your home qualifies for the interest deduction. Home equity loan interest.