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Comment by scarface_74 | Hacker News Reader

To a first approximation, no one actually takes advantage of the mortgage tax deduction any more because the standard deduction is so high and the cap on state tax/property taxes is so low that most people don’t itemize.

Only about 10% itemize.

https://www.taxpolicycenter.org/briefing-book/what-are-itemi....

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And the majority of those make more than $500K. The deductions are probably mostly some combination of mortgages on very expensive properties or very large charitable contributions, probably often tax-shielded in some manner.

You can’t deduct interest on personal income tax for mortgages over $750,000, so it seems somewhat unlikely that such deductions make up any significant amount of the deductions: https://www.irs.gov/publications/p936#en_US_2023_publink1000...

The $750,000 amounts to a cap on the deduction. If your mortgage is in excess of that amount, you would pro-rate the deductible interest accordingly.

I think it's reasonable to say that the folks with the largest mortgages are the ones most likely to itemize mortgage interest, even if they are capped.

Yeah, that is what I was trying to convey with regards to the interest deduction being capped, not that the deduction just stopped. I think I was a bit muddled with my second point as I was trying to suggest by the time you are at a very high income level, your deductions are primarily made of other things, because the mortgage interest deductions can only be so large. That's indeed what the underlying data from the IRS shows as you go up in income past $500k a year comparing column 91 (total home mortgage interest deducted by itemized filers) to column 61 (total itemized deductions) in the ridiculously massive table that the the Tax Policy Center summarizes from that starts on page 137: https://www.irs.gov/pub/irs-pdf/p1304.pdf

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