I refinanced my mortgage in 2017 to use some equity to pay for home improvements. I only used about half of that money by the end of 2018 so I was penalized under the new tax reform and required to take a standard lower single deduction rather than deducting itemized mortgage interest and property taxes. By the end of 2019, I will have used the rest of the equity loan for home improvements. Will I be able to deduct mortgage interest again now?
- If you itemize, you can deduct the interest on up to $750,000 in mortgage debt, if the loan was used to buy or improve a first or second home.
- Mortgages and refinances taken out before December 16, 2017 are grandfathered in at the $1 million debt limit.
- You can still deduct the interest on a new or existing home equity loan or line of credit, but only if it’s used to buy, build, or substantially improve your home and your total mortgage debt doesn’t exceed $750,000.
You can deduct property taxes as an itemized deduction. However, the total of your state/local income taxes or sales taxes plus your property taxes are limited to $10,000 ($5,000 if filing as Married Filing Separately)
If I purchased a new home in mar of 2019 and refinanced in Jan 2020, am I liable for any amounts ? This was the second time I used a VA loan for the new home I bought. Any thoughts?