The New Year offers a time to reflect over the past twelve months and brings hope for the next twelve. January comes with a dark cloud on the horizon… tax time in April is a mere four months away and is the perfect time to start getting your financial ducks in a row. Here’s an article by Dan Green of The Daily Mortgage Reports.com with several tips for maximizing your mortgage interest deduction:
Want bigger tax deductions? Consider making your upcoming January mortgage payment a few days early.
If you took advantage of last year’s low refinance mortgage rates you might wonder if the closing costs you paid to lenders like Amerisave are tax deductible. Unfortunately most of the fees you paid are not a tax write-off; however, if you prepaid mortgage interest on the transaction that interest is a tax deduction. (With a few rules to follow, of course)
If you’d like to increase your mortgage deduction you can consider making your January payment by December 31st like Dan Green suggests. Just remember you’ll have one less payment on the books the following year so the net effect of making a payment early is that you’re borrowing against next year’s deduction. Prepaid taxes and any discount points you paid when refinancing are another often over-looked tax deduction. Keep in mind there may be special rules to follow if the property in question is not your primary residence and the IRS treats the home as an investment property.
The best advice I can offer when it comes to taxes and your mortgage is don’t try and cut corners on your tax return. You might get away with it for a while; however, it always catches up with you one way or another. Pay your fair share and you’ll sleep better with one less thing to worry about.
If you’re considering mortgage refinancing in 2012 you can learn more about getting the lowest refinance rates without paying unnecessary fees or markup with my free Underground Mortgage Videos.
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You can learn more about paying less for your next home loan by checking out my free Underground Mortgage Videos.
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