Home Equity Loan Interest

The Tax Cuts and Jobs Act of 2017 have changed how interest from a home equity loan or home equity line of credit (HELOC) is treated for a tax deduction. It hinges on how the funds are used.

Home equity loans or HELOCs used to buy, build or substantially improve the home (e.g., build an addition) can still have the interest deducted. Interest on home equity loans or HELOCs used for personal expenses, such as paying off credit card debt, buying a car, etc. are no longer deductible.

Please keep this in mind if you are planning on taking out a home equity loan for uses other than buying or improving your home. For more information on this important change in the tax law, please visit this IRS news release .

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Young Tax Service, Inc.

Your Western New York guide through tax preparation and financial planning.