The new tax law, effective January 1, 2018, nearly doubled the standard deduction. Consequently, 57 percent fewer taxpayers will claim the mortgage interest deduction, according to a new congressional report.
However, the mortgage interest deduction was not universally used by taxpayers. Research from the Urban Brookings Tax Policy Center show that only 20 percent of the roughly 150 million tax returns received by the IRS in the past few years claimed this deduction, CNBC reports. Homeowners still eligible to take the deduction can write off the interest for $750,000 in loans, lower than the previous limit of $1 million.
The new report estimates that 18 million households will itemize deductions this year, down from 46.5 million last year. About 13.8 million taxpayers will be able to claim the mortgage-interest deduction in 2018, down from more 32.3 million in 2017, estimates from the Joint Committee on Taxation show. Fewer taxpayers are expected to itemize their deductions, which is the only way to take advantage of the tax break for interest paid on mortgages.
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