How to Deduct Home Mortgage Interest When Filing Separately

The deduction for home mortgage interest is a valuable one to taxpayers who are also homeowners. If you are married and are filing your taxes separately, you must follow certain restrictions and rules when deducting the mortgage interest that you've paid throughout the year.


All homeowners are limited in the amount of mortgage interest they can deduct in a given year. If you are married and filing separately, both you and your spouse can each deduct the interest you pay on $500,000 worth of a mortgage loan. If, for example, you have a mortgage loan of $700,000, you and your spouse can each deduct only the interest payments you each have made on $500,000 of that loan.

Home Equity Debt

If you've taken out a home equity loan or home equity line of credit, you and your spouse can also deduct the interest that each of you paid on those loans during the year. You and your spouse can each deduct the interest payments you made on up to $50,000 worth of home equity debt.

What Is a Home?

The Internal Revenue Service has specific rules concerning what a home is, and you and your spouse need to make sure that your home fits them before claiming a mortgage interest deduction. The IRS defines a home as a house, condominium, cooperative, boat, recreational vehicle or boat that has sleeping areas, cooking space and toilets.


To deduct your mortgage interest, you and your spouse must each file IRS Form 1040 at income tax time and itemize your deductions. Your mortgage lender will at the start of the year send you a 1098 form in the mail. This form will show both you and your spouse the total amount of mortgage interest that you paid during the year. You and your spouse should both enter this amount in line 10 of your respective 1040 Forms.

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I'm a veteran freelance writer with more than 15 years experience writing for newspapers, consumer magazines and trade publications. My stories have appeared in the Chicago Tribune, Washington Post, Christian Science Monitor, BusinessWeek Online, Business 2.0 Magazine and many other publications. I am also the managing editor of a real estate magazine based in Chicago and the writer of, a blog devoted to residential real estate. This year, my first comic-book series, GEARZ, was published by Blue Water Publishing. The company will be publishing three other of my comic-book mini-series in 2008 and 2009.

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