Yes, TurboTax will limit the federal deduction for mortgage interest to $750,000. The IRS lets you deduct your mortgage interest, but only if you itemize deductions. You can't deduct the principal (the borrowed money you're paying back). In addition to itemizing, these conditions must be met for mortgage interest to be deductible:
- The loan is secured, which means the lender has a guarantee of payment, usually in the form of property. If a borrower defaults on payments, the lender can seize the property that’s securing the loan. If you’re buying or refinancing a home, especially if it’s your first home, the loan is usually secured by the home you’re buying or refinancing.
- The debt can’t exceed $750,000 (or $1,000,000 if the loan was taken before December 16, 2017) to get the full deduction.
Deducting Mortgage Interest
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