Mortgages allow their borrowers to qualify for a special tax deduction. On your tax return, you are allowed to deduct mortgage interest paid on the first $750,000 of debt if you’re a single filer, a married couple filing jointly, or a head of household. For married couples filing separately, you can deduct interest on the first $375,000 of debt.Additionally, if you sell the home before the mortgage is paid off, the remaining balance will get deducted from the sales proceeds. This can impact your profit and the amount of capital gains tax, if any, you are required to pay.