A tax-overhaul plan being negotiated in Washington, D.C. has the potential to virtually eliminate the mortgage interest deduction, a break lawmakers once considered untouchable, The Wall Street Journal reports.
The break allows homeowners to deduct from federal taxes money spent on interest tied to mortgage loans of as much as $1 million. So far the deduction is one of the few being kept alive in the framework put forward by Republican leaders and President Donald Trump this month.
But while the mortgage deduction doesn’t face extinction, it might face irrelevance because the tax plan also would nearly double the standard deduction for individuals and couples—meaning only the highest earners would continue to itemize their deductions.
The standard deduction is likely to be the better option for most taxpayers.
