1. Mortgage Interest Deduction
Mortgage interest is tax-deductible, but this year the deduction has been adjusted. The deduction is limited to interest on up to $750,000 of debt ($375,000 if you’re married filing separately) instead of $1 million of debt ($500,000 if married filing separately).
2.Property Tax Deduction
Property taxes are generally still tax-deductible, but this year the deduction is subject to a total cap of $10,000, which includes property taxes plus state and local income taxes or sales taxes paid during the year ($5,000 if married filing separately).
3.HELOC Tax Deduction
You can only deduct HELOC interest only if you used the HELOC money “to buy, build or substantially improve the taxpayer’s home that secures the loan,” according to the IRS. In other words, if you used the money to improve your house, you can probably deduct the amount.
4. Itemized vs Standard Deduction
The standard deduction increased dramatically to $12,000 for single filers and $24,000 for joint filers. The effect is that a married couple filing jointly would probably need to have more than $24,000 in itemized deductions — those related to owning a home and any others as well — in order to make itemizing the better route financially.
Individuals and homeowners who’s deductions are larger than the standard deductions are the only tax payers that should consider itemizing their deductions.