At the close of the year we have many things on our minds, and one of the more unpleasant thoughts might be our 2013 taxes. But, homeowners have some relief through their ability to write off mortgage interest.
Many people know about this write off but there are a couple of things you need to do to make sure you’re taking advantage of the full benefit. Let’s explore whether or not your home may or may not qualify for the mortgage interest tax deduction.
First, make sure your home qualifies. According to the IRS, you can write off any mortgage interest so long as you meet the following conditions:
- You file Form 1040 and itemize your deductions on Schedule A
- Your mortgage is a secured debt on a qualified home in which you have a recorded ownership interest
That’s it! Easy stuff, right? Maybe. Just make sure you understand what makes a qualified home, and how ownership interest is recognized.
The IRS says that a qualified home is your main home or your second home. A home, they say, can be a house, condo, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking and toilet facilities.
Your ownership interest is determined when your main home or your second home secures your mortgage, and the mortgage is publicly recorded in your name. If you meet these qualifications, the interest is tax deductible!
But did you know that there are other costs associated with your mortgage that are also deductible? Take a look at the other costs associated with your mortgage that you can write off with you mortgage interest:
- Any mortgage insurance premiums paid during the year
- Any late payment charge
- Any prepayment penalty you incurred from selling your home
- Any loan discount points you’ve paid or loan origination fees (even if they were paid by the seller!)
For more information on this great way to take advantage of the Home Mortgage Interest Deduction, talk to your accountant or visit www.irs.gov.