CITIES SERVED:

Camp Pendleton South - 92058

Absolutely, Positively, Caring Attitude, Quality Service, Guaranteed!

Real Estate Agent

Alicia R. Chase

(619)727-1244
Ca DRE License #00758097
alicia@teamchase.com

Mortgage Tax Deductions

There are a number of benefits that come from home ownership. One of which is the mortgage tax deduction, but there are certain restrictions that should be considered.Many home shoppers are excited about the prospect of owning a home, not just because they have a house to call their own, but also because of the tax benefits often derived from home ownership.

The mortgage tax deduction may be a little overhyped. The mortgage tax deduction isn’t an automatic deduction. In fact, some homeowners may get little or no tax benefit from paying mortgage interest.

How the Mortgage Tax Deduction Works

The mortgage tax deduction is one of those tax deductions that requires you to itemize to get the benefit. The IRS automatically lets you take a standard deduction each year based on whether you’re married or single. If your itemized deductions, including mortgage interest and other deductions, are less than the standard deduction, it makes more sense to take the standard deduction. In 2011, the standard deduction for single tax filers is $5,800; $11,600 for joint filers; and $8,500 for head of household filers.

You don’t get to reduce your tax by the full amount of the mortgage interest paid each year. Instead, you’ll only be able to reduce your income tax by a percentage based on your tax bracket: $15 for every $100 in mortgage interest paid if you’re in the 15% tax bracket; $25 for every $100 in mortgage interest paid if you’re in the 25% tax bracket; and so on. So if you make more money and are in a higher tax bracket, your mortgage deduction is bigger.

Because most mortgage interest is paid at the beginning of the loan, you may not get the benefit of the mortgage tax deduction for long. Each year, you’ll pay less and less mortgage interest and your other itemized tax deductions will have to increase if you want to continue to take the tax deduction.

How to Qualify for the Mortgage Tax Deduction

To take the mortgage tax deduction, you must file your taxes on Form 1040 and itemize your deductions on Schedule A. You must be liable for the loan. You’re not allowed to deduct payments on someone else’s loan if you’re not legally liable for the payments. The mortgage must be secured debt for a qualified home, meaning your home could satisfy the debt in case of default and the mortgage is recorded with your state.

Which Mortgage Costs Are Deductible?

Your mortgage lender will send a Mortgage Interest Statement, Form 1098 to you each year that lists the amount of mortgage you paid in the year. The number is also reported to the IRS so it’s important that the numbers on your tax return match what’s on the form. The mortgage lender will also send a statement including the amount of property taxes you paid in the year. This tax is also deductible on your income tax return.

There’s a maximum mortgage limit of $1 million on your first or second home and the home must be secured by a mortgage. You can take a deduction for a home you purchased with cash and later borrowed a home equity loan.

If your mortgage was originated from 2007 through 2011, you can deduct private mortgage insurance payments if your income is less than $109,000 for joint filers and $54,500 for separate filers.

Let Me Help You Get Started Today
(619)727-1244

Sitemap:Home Buyers Home Sellers Property Management Investing In Real Estate Frequently Asked Questions Contact Us Home Built by MySEOwebsites.com

Pala - 92059

Palomar Mountain - 92060

Pauma Valley - 92061

Poway - 92064

Ramona - 92065

Ranchita - 92066

Rancho Santa Fe - 92067

San Marcos - 92069

Santa Ysabel - 92070

Santee - 92071

Solana Beach - 92075

San Marcos - 92078

Vista - 92081

Valley Center - 92082

Vista - 92083

Vista - 92084

Warner Springs - 92086

Rancho Santa Fe - 92091

La Jolla - 92093

Downtown San Diego - 92101

San Diego - 92102

Mission Hills - 92103

North Park - 92104

East San Diego - 92105

Point Loma - 92106

Oceanside - 92107

Mission Valley - 92108

Pacific Beach - 92109

Old Town San Diego - 92110

Linda Vista - 92111

Logan Heights - 92113

Encanto - 92114

San Diego - 92115

San Diego - 92116

Clairemont - 92117

Coronado - 92118

San Carlos - 92119

Del Cerro - 92120

Sorrento Valley - 92121

University City - 92122

Mission Valley - 92123

Tierrasanta - 92124

Mira Mesa - 92126

Rancho Bernardo - 92127

Rancho Bernardo - 92128

Rancho Penasquitos - 92129

Carmel Valley - 92130

Scripps Miramar - 92131

Paradise Hills - 92139

Miramar - 92145

Otay Mesa - 92154

San Diego - 92155

San Diego - 92161

San Ysidro - 92173

Murrieta - 92562

Murrieta Hot Springs - 92563

Murrieta - 92564

Menifee - 92584

Temecula - 92589

Temecula - 92590

Temecula - 92591

Temecula - 92592

Temecula - 92593

Alpine - 91901

Bonita - 91902

Boulevard - 91905

Campo - 91906

Chula Vista - 91910

Chula Vista - 91911

Chula Vista - 91913

Chula Vista - 91914

Chula Vista - 91915

Descanso - 91916

Dulzura - 91917

Guatay - 91931

Imperial Beach - 91932

Jacumba - 91934

Jamul - 91935

La Mesa - 91941

La Mesa - 91942

Let Me Help You Get Started Today
(619)727-1244