The Mortgage Interest Deduction and You!

Taxes.

   Just the very word can send chills down your back. However, do not fret! There are many advantages to being a homeowner when it comes to tax time, especially if you have a home mortgage.

    The good news is that if you have a home mortgage, you may be eligible to claim a tax deduction for the interest you have paid on loan for the past year. You may also qualify for tax deductions for certain types of home improvements, PMI insurance payments, any home office space (if used for your business) and property taxes paid. This can be a complicated process, so the best advice I can offer is that you should consult with a CPA or other tax professional to ensure that the deductions claimed are legitimate. Also, many self-filers commonly leave 'money-on-the-table' as they may overlook prepaid expenses which could also be deductible in the first year of home ownership.

   One good source of information is a recently published interview with tax expert Abe Schneier, a senior technical manager with the American Institute of CPAs. Abe covers a wide range of topics from Interest Deductions to Capital Improvements and the importance of planning ahead. That article can be found here: House Logic Interviews Abe Schneier.

   There are also some great resources on the web to help estimate these deductions as you progress throughout the tax year. Once such site is Bankrate. They have a variety of finance related calculators covering every imaginable loan type. They also have a interesting calculator that will help you calculate your Mortgage Interest Deduction. For those of your who are financially oriented, it will also what the net effect of this deduction had on your actual APR for that year. In a nut shell, you can brag to your friends that your interest rate was lower (and they will think you are some kind of financial savant for figuring that out). Who doesn't like that? You can find that calculator here: Bankrate Mortgage Tax Deduction Calculator.

   I hope this helped a little and saves you a few dollars at Tax time. For any Real Estate related questions, please visit me at my website: Jason's Real Estate Site.