Question

Is it true that I can't deduct my mortgage interest any longer under the new tax laws?

Forum|Forum|6 years ago
March 25, 2020
1 reply
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I refinanced my mortgage in 2017 and while most of the money obtained paid off my existing mortgage, about 15% of the money was used to pay off debt (credit card and car loans).

When I did my 2018 taxes using TurboTax (first year under the new tax law) I wasn't able to deduct any interest for my mortgage at all. As a result I went from usually getting a tax refund to having to pay a sizable sum.

Does this sound correct or did I just answer a few of the questions incorrectly? It would seem to me that even if the money I used to pay off debt was excluded that the money used to pay off the existing mortgage and the interest on that should still be deductible.

Thank you in advance for the help.

J

JamesG1

The Tax Cuts and Jobs Act of 2017 placed significant restrictions on mortgage interest. For tax years 2018 through 2025, you can only deduct the interest from the amount of your loan that was used to buy, build or improve the home that secures the loan.

So if you 'took out' 15% of the loan proceeds for other purposes, 15% of the mortgage interest would not be deductible mortgage interest. There are also other restrictions. See this TurboTax Help.

I recommend that you review the mortgage interest deduction questions with this information in mind.

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