Are home equity lines of credit tax deductible?

Great Answer

Professionally Researched. (What's this?)

Only some of the interest on home equity lines of credit is tax deductible. The amount you can deduct depends on your filing status and how you use the proceeds of the loan.

Interest Limits

For most home equity lines of credit, you can only deduct the interest on the first $50,000 if you are a single tax filer or the first $100,000 if you are married and file a joint return.

Home Improvements

If you use the proceeds from the home equity line of credit for home improvements, the Internal Revenue Service (IRS) treats the interest on a home equity line of credit in the same way it treats mortgage interest, meaning you can deduct the interest on the first $500,000 if you are single or the interest on the first $1 million if you are married and file a joint return.

Determining Interest

Your lender should send you a Form 1098 that shows the interest that you paid during the year in Box 1.

Function

The deduction for home equity line of credit interest is an itemized deduction, which means you are not allowed to also Form 1040.

Should You Take Deduction?

You should only take the deduction for home equity lines of credit interest if all of your itemized deductions exceeds your standard deduction. Other common itemized deductions include charitable donations and mortgage interest.

Source:

Bankrate: Tax benefits of a home equity line of credit; George Saenz

IRS: Form 1098; Mortgage Interest Statement

IRS: Schedule A--Itemized Deductions

More Questions. Additional questions in this category.

ANSWERBAG BUZZ

Home equity line of credit tax deductible tax return

Home equity line of credit tax deduction

I didn t receive a 1098 from home equity line of credit

Home equity line of credit tax

Home equity line of credit tax deductible 2009

Question

Are home equity lines of credit tax deductible?

Answers. 3 helpful answers below.