Questions & Answers

What if my total home mortgage debt is over the deductible limit and I'm itemizing deductions?

For debt taken out after December 15, 2017, you can only deduct home mortgage interest on up to $750,000 ($375,000 if married filing separately) of that debt. For debt taken out on or before December 15, 2017, you can deduct interest on up to $1,000,000 ($500,000 if married filing separately) of that debt.

To calculate your indirect deductible mortgage interest:

  1. Treat all mortgage interest you paid as a personal expense.
  2. Use Publication 936  to figure out your deductible home mortgage interest amount.
  3. Include as your indirect deductible mortgage interest the amount of deductible mortgage interest figured in Step 2 that is attributable to the home in which you conducted the business.

If your deductible mortgage interest is limited, include any excess amount attributable to the home in which you conducted business as indirect excess mortgage interest.

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