When you own a home and you pay a mortgage on it, then the interest on that mortgage may be deductible on your tax return.\u00a0 Any interest paid on a line of credit or home equity loan also counts as mortgage interest.\u00a0 You can deduct mortgage interest only if you meet the following:<\/p>\n
1.\u00a0 You must file form 1040 and itemize on Schedule A<\/p>\n
2.\u00a0 You must be legally liable for the loan<\/p>\n
3.\u00a0 The mortgage must be a secured debt on a qualified home in which you have an ownership interest.<\/p>\n
A\u00a0qualified home is your main home or second home and a home includes a\u00a0condo, co-op, mobile home, or boat.<\/p>\n
You can also deduct late payment charges from your mortgage\u00a0as mortgage interest and any prepayment penalties you may have paid.\u00a0<\/p>\n
Mortgage interest is reported to you on form 1098 each year, as long as the total interest paid was more than $600.\u00a0<\/p>\n
There are limitations on how much home mortgage interest can be deducted.\u00a0 The total amount of debt you can treat as home acquisition debt at any time on your main and second home cannot exceed $1 million.\u00a0 In addition to the $1 million of home acquisition debt, you may also deduct interest on up to $100,000 of home equity debt.<\/p>\n