Interest paid is deductible in many cases if the taxpayer was legally liable for the debt. Refer to the table below.
Where to Deduct Interest Expenses Paid
| Form of Debt | Deduct Interest On |
| Investment Debt | Form 4952 -> Schedule A |
| Investment Debt - Royalties | Schedule E |
| Qualified Home Mortgage | Schedule A |
| Business Property | Schedule C, E, or F |
| Rental Property | Schedule E |
| Student Loan Interest | Form 1040 Schedule 1 |
| Personal Debt Interest | Not deductible |
For tax years beginning in 2018 and through 2025, the deductible amount of home mortgage interest paid varies depending on the date of the mortgage, the amount of the mortgage, and how the taxpayer uses the proceeds.
Qualified Home Mortgage Interest
A taxpayer can deduct home mortgage interest from a loan that was used to buy, build, or substantially improve their home. Many taxpayers receive Form 1098 reporting the interest they have paid to their mortgage company during the tax year, but some taxpayers may pay mortgage interest to an individual and therefore will not receive Form 1098.
For tax years beginning in 2018 and through 2025, the deductible amount of home mortgage interest paid varies depending on the date of the mortgage, the amount of the mortgage, and how the taxpayer uses the proceeds. A qualified home is the taxpayer's main home or second home.
- Mortgages taken out on or before October 13, 1987 - There are no limits. Interest is fully deductible regardless of how the proceeds of the loan are used.
- Mortgages acquired after October 13, 1987 and before December 15, 2017 - The combined acquisition debt on the taxpayer's main and second home is limited to $1,000,000 ($500,000 for MFS filing status). In order to deduct interest paid, the proceeds must have been used to buy, build, or substantially improve the taxpayer's main or second home.
- Mortgages acquired after December 15, 2017 - The combined acquisition debt on the taxpayer's main and second home is limited to $750,000 ($375,000 for MFS filing status). In order to deduct interest paid, the proceeds must have been used to buy, build or substantially improve the taxpayer's main or second home.
- Home equity debt acquired after December 15, 2017 - The deduction for home equity interest is suspended unless the proceeds are used to buy, build, or improve the home that secures the loan.
Program entries
To access the Schedule A Interest Menu in TaxSlayer ProWeb, from the federal section of the tax return (Form 1040) select:
- Deductions
- Itemized Deductions
- Mortgage Interest and Expenses
- Did you receive a Form 1098? - Select Yes or No as appropriate.
- Yes - Click Continue.
- Was the money from this loan used exclusively on this home? - Select Yes or No as appropriate.
- Form 1098 Information - Enter the information showing on Form 1098.
- No - Indicate whether you are reporting mortgage interest or points, then click Continue.
- If reporting mortgage interest, enter information about the seller and the amount of mortgage interest paid.
- If reporting points, enter the seller's name, the amount of amortizable points paid during the year, and the amount of other points paid, if any.
Note: This is a guide on entering mortgage interest into TaxSlayer ProWeb. This is not intended as tax advice.
Additional Information: