Music, thankfully, one of the biggest scams in the American tax code is finally under attack in the House version of Republican tax reform. It's the mortgage interest deduction, which currently allows homeowners to deduct interest paid on mortgages up to 1 million dollars for two houses. Ever since owning a home has been a central tenet of the American Dream since the end of World War II and the rise of suburbia, it has been assumed that deducting mortgage interest from taxes is as American as apple pie. The house plan would limit filers to deducting interest on the first five hundred thousand dollars of a mortgage on just one house. This has sent a blind panic through wealthy homeowners, realtors, and the building trades, all of whom are terrified that a government subsidy is being taken away. "We are very concerned with the limitation on the mortgage interest deduction, and it's really limited into what's the real problem with the House bill," says one homeowner. The real problem, however, is that the House bill doesn't go far enough. The mortgage interest deduction should be entirely scrapped, allowing housing prices to reflect real market values. The deduction is typically justified by claiming that it helps middle-class people afford homes, but it actually increases the price of housing, making it artificially cheap to borrow money. This means that homebuyers are willing to borrow more, driving up prices. Interestingly, countries like England, Canada, and Australia do not allow their taxpayers to deduct mortgage interest, yet they have higher rates of homeownership than the United States. This deduction disproportionately benefits the wealthiest Americans, costing approximately seventy billion dollars each year in foregone revenue. Both the House and Senate versions of the tax bill leave the mortgage interest deduction largely untouched, which is absurd. Only...
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Mortgage interest deduction 2023-2025 Form: What You Should Know
But you can exclude up to 500,000 on a joint return if all mortgages are owned by different individuals or are controlled, in whole or in part, by the same individual. You don't have to buy the house for the deduction. The deduction only applies to the interest paid on the mortgage. Mortgage Interest Deduction: FAQs Aug 19, 2025 — If your home purchase, construction, construction and renovation expenses in 2025 have a cost that's more than the least of 5% of the adjusted basis or 500,000, the IRS will only allow you to deduct 2,125 of the overage. Mortgage Interest: A Tax Deduction Every Person Needs Sep 10, 2025 — You can make the mortgage interest deductible on your federal income tax this year. The interest you paid on your first home must be claimed on Schedule A, Line 10, or Schedule K-1, Line 22, of your 2025 federal income tax return. Mortgage Interest Deduction for the 2018-Year Mar. 17, 2025 — Mortgage interest expenses paid or credited this year are not deductible in 2017. Mortgage Interest Deduction for the 2025 Tax Year Nov. 17, 2025 — The mortgage interest you paid or credited this year may be deducted in 2019. Mortgage Interest Deduction: A Quick Tip Nov. 22, 2025 — Deducting mortgage expenses in 2025 is not difficult. Just follow these five easy steps: 1. If any part of what you paid or credited this year is business expenses, split that part between business and personal expenses. 2. You may use business depreciation expenses, but you have to decide if the business use of the expense is a good deal, and if so, how you account for the expense. 3. If you have real estate income and don't want that income taxed, you can use the 500,000 home equity deduction on line 8d of Schedule A (Form 1040), to get tax-free real estate gains for the home. 4. If you plan to use the mortgage interest deduction in 2025 on your 2025 tax return, file a single return (not a joint return) on Line 27 of Form 1040. Include a Form 1040NR. 5. If you aren't going to use the deduction next year, file a joint return. Include a Form 1040 and include a Schedule A (Form 1040).
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