The mortgage interest deduction can provide substantial tax savings for homeowners in 2024. With the higher mortgage rates seen in 2023, more filers may benefit from itemizing mortgage interest rather than taking the standard deduction.
Key Highlights
- The 2024 standard deduction is $14,700 for single filers and $29,400 for married joint filers (IRS)
- You can deduct interest on up to $750,000 in mortgage debt for primary and secondary residences (IRS Publication 936)
- Itemizing is more likely to provide greater savings if total mortgage interest paid exceeds around $10,000
Deduction Eligibility and Calculation
You can deduct mortgage interest if you itemize deductions on Schedule A (Form 1040). The deduction applies to interest paid on primary residences and second homes.
To calculate the deduction, tally the mortgage interest paid in 2024 based on the Form 1098 statement from your lender. This includes interest paid on:
- Primary mortgage
- Second mortgage or home equity loan (if used to improve your home)
The total deductible amount faces a cap based on the date and amount of your mortgage:
| Mortgage Origination Date | Maximum Limit |
|---|---|
| Before 10/13/1987 | Full amount |
| 10/13/1987 – 12/15/2017 | $1 million |
| After 12/15/2017 | $750,000 |
When Itemizing Makes Sense
Itemizing tends to provide greater tax savings if your total deductions exceed the standard deduction amount. As a general guideline for 2024:
- Single filers – Itemize if total deductions > $14,700
- Married filing jointly – Itemize if total deductions > $29,400
With the elevated mortgage rates in 2023, many filers may now hit these thresholds. For example, $300,000 mortgage at 6% interest equates to around $18,000 in potential deductions.
Consult a tax professional to determine the best approach for your situation. Properly unlocking all available tax savings takes strategic planning.