Marriage usually brings excitement and happiness to someone’s life, but in certain states, it can also bring a tax penalty. The Tax Cuts and Jobs Act of 2017 eliminated the marriage penalty on income tax for all but those Americans in the highest tax bracket on a federal level by doubling the single filer amount for joint filers. But investing research platform BestBrokers found 18 states that still carried a “marriage penalty” in 2025. Couples filing jointly in those states face higher taxes than if they ...

Core Points - The mortgage interest deduction allows homeowners to deduct interest on certain loans, but changes in tax laws have affected its applicability and limits [1][2][12] - The Tax Cuts and Jobs Act (TCJA) of 2017 reduced the maximum mortgage interest deduction from $1 million to $750,000 for primary residences, a change that has been made permanent by subsequent legislation [4][5] - Homeowners must itemize deductions to benefit from the mortgage interest deduction, which has become less advantageous due to an increase in the standard deduction since 2018 [12][13] Tax Deduction Limits - For the 2025 tax year, homeowners can deduct mortgage interest on loans up to $750,000 if the mortgage originated after December 15, 2017, and up to $1 million for mortgages originated before that date [3][11][23] - Married couples filing separately can deduct interest on loans up to $375,000 each for mortgages originated after December 15, 2017 [11][23] - Rental property mortgage interest is generally treated as a business expense and is not subject to the same personal-use rules [6][11] Itemization vs. Standard Deduction - The standard deduction has increased from $12,000 for single filers and $24,000 for joint filers in 2018 to $15,750 and $31,500 respectively for 2025 [13][14] - Homeowners need to have deductible expenses exceeding the standard deduction to make itemizing worthwhile, which is a significant consideration for many taxpayers [12][24] - Examples show that for lower mortgage amounts, itemizing may not be beneficial unless combined with other significant deductions [15][17] Refinancing Implications - Homeowners who refinance their mortgages may lose eligibility for the higher $1 million deduction cap, as they would then be subject to the new $750,000 limit [8][10] - Misunderstandings about how refinancing affects tax deductions can lead to filing errors, as some homeowners may incorrectly believe they still qualify for the higher cap after refinancing [10] Home Equity Loans and HELOCs - Interest on home equity lines of credit (HELOCs) and home equity loans is only deductible if the funds are used to buy, build, or substantially improve the home that secures the loan [19][20] - Documentation is required to trace the use of funds from HELOCs to determine the deductible portion of interest [19]