The IRS is now auditing to see if too much home equity debt interest is being deducted from your taxes.

Remember, equity debt is debt not incurred to acquire or improve the home and taxpayers frequently exceed the equity debt limit and fail to adjust their interest deduction accordingly. Normally, you are allowed to deduct the interest on up to $1 million of home acquisition debt which includes subsequent debt incurred to make improvements, but not repairs, and the interest on up to $100,000 of home equity debt. (more…)