can i deduct home equity line of credit interest

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The deduction amount includes the interest you pay on your mortgage, home equity loan, home equity line of credit (HELOC) or mortgage refinance. If you took on the debt before Dec. 15, 2017, you can deduct interest on $1 million worth of qualified loans for married couples and $500,000 for those filing separately for the 2018 tax year.

The interest for a home equity loan or HELOC (home equity line of credit) is an allowable deduction if you itemize. You’ll need to meet some conditions: The loan or line of credit is secured (put up as collateral to protect the lender) by your main home or a second home. The home securing the loan must have sleeping, cooking, and toilet facilities.

The answer to the question of whether interest on a home equity line of credit is tax deductible is maybe. If you need cash and have equity in your home, a home equity loan or line of credit can.

Homeowners have two options: they can take out a home equity loan, which is a one time loan with a fixed interest rate, or they can take out a home equity line of credit, which acts like a credit.

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Should I refinance to make it tax-deductible again?” Or just “How do I know if I can deduct the Home Equity Line of Credit (HELOC) interest?” We will answer your questions and more below. The basics.

Responding to many questions received from taxpayers and tax professionals, the IRS said that despite newly-enacted restrictions on home mortgages, taxpayers can often still deduct interest on a home equity loan, home equity line of credit (HELOC) or second mortgage, regardless of how the loan is labelled.

However, one big benefit in the past was being able to deduct interest on a home equity loan. Now that you can’t do that unless you’re using the loan to pay to buy or improve your home, using a home.

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Before you decide to take out a home equity line of credit, it’s smart to know whether the interest on your HELOC might be tax-deductible. The federal tax law that was passed in December 2017.