The deduction caps at $2,500 regardless of how much interest was actually paid, and phases out entirely above a MAGI threshold.
How it works
The deduction before phase-out is the lesser of $2,500 or interest actually paid. Above the phase-out’s starting MAGI, the deduction shrinks proportionally across the phase-out range, reaching zero at the top.
What this does not include
Married filing separately generally can’t claim this deduction at all, regardless of income — a filing-status eligibility rule this calculator doesn’t check, since it assumes an eligible filing status was already confirmed.
How to use this calculator
- Enter interest paid and your MAGI.
- Enter the current year’s phase-out start and range width for your filing status.
Frequently asked questions
Do I need to itemize to claim this deduction?
No — it’s an above-the-line deduction, available whether or not you itemize other deductions.
Does the $2,500 cap ever increase?
No — unlike many tax figures, the $2,500 cap itself is not inflation-adjusted; only the MAGI phase-out thresholds change from year to year.
What counts as MAGI here?
Generally AGI with certain deductions added back — the specific MAGI calculation for this deduction is defined in IRS Publication 970, not computed by this calculator.
