With the new tax changes, can I deduct my interest on my existing home equity line that was used for home improvements? I see that the new tax law does not allow the deductions until 2026 but had some exceptions. Please explain?
Yes, you can still deduct the interest on home equity loans taken out earlier. But for NEW home equity loans/lines of credit taken out in 2018, you MUST use the money to purchase or substantially improve the property. You can no longer take out money to consolidate loans or pay for a college education and deduct the interest. And the maximum you can deduct is the interest on $750,000 of total borrowings against your home.