In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday delves into the complexities of the mortgage interest deduction, a topic that can stir quite a bit of confusion among homeowners. She clarifies that while many believe they can deduct the entire amount of interest on mortgages up to $750,000, the reality is nuanced, especially for those who have refinanced their homes in recent years. Dr. Friday highlights the changes in deduction limits from over a million dollars to the current cap at $750,000, noting the significant impact of rising house values in Tennessee. This episode is essential for anyone navigating the intricacies of itemizing deductions and understanding how refinancing affects their tax situation.
G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.
Mortgage interest deduction. Boy, can this cause some conflict because if you’re able to itemize, many people think they can just write off their entire amount of interest even if the mortgage is over $750,000. And for many, they may not have, they’ve done a refinance, right? Because many people reduce their interest, they refinance their home in the last couple years. And if you did that, you may have had an old mortgage that would have qualified over a million dollars. The new ones only qualify up to $750,000, which many people listening may say that’s not a problem. But in Tennessee, house values went up a lot in the last couple years. If your mortgage is over $750,000, you can only take interest up to $750,000.
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