Since you haven't yet paid taxes on the interest income you report on your tax return, you'll owe money to the IRS if the taxes due outweigh the amount of taxes you paid throughout the tax year.

including interest. There is some good news, though. Since the IRS adjusts federal income tax brackets each year for inflation, you could pay a lower tax rate for 2025 than you paid last year.

Additionally, deducting mortgage interest isn't the right choice for everyone. Here’s what you should know about claiming the mortgage interest deduction on your federal income tax return.

Overview of the Tax Cuts and Jobs Act (TCJA) of 2017 The TCJA was an overhaul of federal tax rules that impacted individuals and businesses. The law lowered income tax rates from many individuals.

However, this rule is subject to certain exceptions. One can claim income tax benefits on interest paid when the personal loan proceeds are used for any of the following purposes. I. For ...