Mortgage Interest Tax Deduction 2008 2009
Posted by TJ on Wednesday March 25, 2009 @ 04:25 PM
[Tags: taxes, accounting, guide]

Mortgage Interest Deduction

Most people are able to deduct fully the amount of mortgage interest paid during the year as an itemized deduction any mortgage paid during the tax year. Mortgage Interest is deducted on Lines 10-14 of Schedule A of Form 1040.

However, the deduction does have some limitations. The deduction is limited to mortgages you took out after October 13, 1987, to buy, build, or improve your home (called home acquisition debt). You also can only fully deduct mortgages that had balances totaling $1 million or less ($500,000 if married filing separately). If the balances on your mortgages totaled $1,000,000 million or more see the table below to see if you qualify for a partial deduction.
Part I Qualified Loan Limit
1. Enter the average balance of all your grandfathered debt. See line 1 instructions 1.
2. Enter the average balance of all your home acquisition debt. See line 2 instructions 2.
3. Enter $1,000,000 ($500,000 if married filing separately) 3.
4. Enter the larger of the amount on line 1 or the amount on line 3 4.
5. Add the amounts on lines 1 and 2. Enter the total here 5.
6. Enter the smaller of the amount on line 4 or the amount on line 5 6.
7. Enter $100,000 ($50,000 if married filing separately).
See the line 7 instructions for a limit that may apply
8. Add the amounts on lines 6 and 7. Enter the total. This is your qualified loan limit 8.

source: Publication 936: Home Mortgage Interest Deduction

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