Home mortgage interest is any interest paid on a loan, line of credit, or home equity loan secured by the taxpayer’s home.
Generally, taxpayers receive Form 1098, Mortgage Interest Statement, which shows the deductible amount of home mortgage interest paid by the taxpayers. Only taxpayers who are legally liable for the debt can deduct the interest in the year it is paid. Remember that taxpayers may have more than one mortgage or may have refinanced during the year and may have multiple Mortgage Interest Statements. Be sure to include them all by referring to the Interview Tips - Itemized Deductions in the Volunteer Resource Guide, Deductions tab.
Certain types of interest are deductible as itemized deductions. Home mortgage interest, points (paid as a form of interest), and investment interest can be deducted on Schedule A. Investment interest is outside the scope of the the VITA/TCE programs and should be referred to a professional tax preparer.
Use the flow chart — Is My Home Mortgage Interest Fully Deductible? — in Publication 17 to determine if the interest should be included on Schedule A.
A taxpayer may be able to deduct interest on a main home and a second home. A home can be a house, cooperative apartment, condominium, mobile home, house trailer, or houseboat that has sleeping, cooking and toilet facilities.