3. **Home Equity Loans:** Home equity loans, also known as second mortgages, can complicate the picture. While interest on these loans might be deductible, the rules are more stringent. You can deduct interest on up to $100,000 in home equity loans, but only if the funds are used for home improvements or to pay for educational expenses.

The Impact of Federal Deductions on California Taxes

More details https://tradeprofinances.com/mortgage/is-mortgage-interest-tax-deductible-in-california/ By carefully considering your individual financial situation, exploring available tax benefits, and consulting with a qualified tax professional, you can navigate the complexities of the tax landscape and make informed choices that optimize your financial well-being as a California homeowner.

2. Consult a Tax Professional

5. **Calculate Your Deduction:** The deductible amount of mortgage interest is the interest paid on acquisition debt up to the applicable limit, plus the interest paid on home equity debt up to the $100,000 limit. * **Consider Home Improvements:** If you are planning major home improvements, research whether they qualify for any tax credits or deductions. * **Home Use**: The deduction is only available for debt used to purchase, build, or improve a qualifying residence, which is defined as a home you use as your primary residence or a second home.