How Do You Deduct Home Equity Loan Interest?
The interest you pay on a home equity loan may be deductible no matter what you use the money for. The deduction can save you money on your taxes. Determine if your itemized deductions are greater than your standard deduction. Mortgage interest, home equity loan interest, state taxes, property taxes and charitable contributions are the main itemizable deductions. The standard deduction is $7,200 if married filing jointly, $6,350 if head of household, $4,300 if single and $3,600 if married filing separately. If your standard deduction is greater, use it. Obtain a Schedule A form if you’ll itemize deductions. Write in the third section of Schedule A the name of the company to which you paid home equity interest and the amount of interest you paid during the tax year. Write in the third section of Schedule A the name of the company to which you paid points or an origination fee to obtain the home equity loan. Only points you paid on money used for home improvement of your main home can be
