• Entry
  • Reader's guide
  • Entries A-Z
  • Subject index

Tax Deductions For Interest on Mortgage Payments

Some countries, including the United States, have tax codes that allow homeowners to deduct the cost of interest paid on their mortgages from their individual income taxes. Ordinarily, this will limit the debt eligible for an interest deduction. Although this is often considered an incentive meant to encourage homeownership, this was not the original purpose behind the interest-based tax deduction. Near the beginning of the 20th century, tax deductions on interest did not cover the first $3,000 (or $4,000 for a married couple) of interest that had been paid. If the tax deduction for mortgage interest had been meant as a benefit to entice people to purchase homes, the amount of excluded interest would have been set much lower. The actual reason for the origin ...

    • Loading...
    locked icon

    Sign in to access this content

    Get a 30 day FREE TRIAL

    • Watch videos from a variety of sources bringing classroom topics to life
    • Read modern, diverse business cases
    • Explore hundreds of books and reference titles