I must first play by the rules and state that I am not a tax advisor, tax consultant or CPA. Hey, I don’t even think I am qualified to do my own taxes. But, it is that time of year to do our duty as citizens and begrudgingly pay what we owe or gladly collect our refund.
In the dark shadows of the year of the mortgage crisis, there is some light at the end of the tunnel when it comes to your taxes. Home ownership is an excellent tax shelter! Being a home owner with a mortgage is the best tax break around. As long as the remaining balance on your mortgage is less than the price of your home, (not as common as it seems in some areas of California) mortgage interest is fully deductible on your tax return. Your mortgage interest is usually the largest component of your monthly mortgage payment, especially in the first years of the mortgage. So for most people, most of your monthly mortgage payment is tax deductable.
There are also other tax breaks when it comes to your mortgage. In some cases, points paid to obtain your mortgage can be tax deductable. For more detailed information, see the 2007 IRS’ Home Mortgage Interest Deduction Publication.
When it comes to taxes and mortgages, I could write a post every day until April 15th and still not run out of content. Or, if you need an automatic 6 month extension, file form 4868. Either way, mortgages and taxes compliment each other perfectly. So conversely, Mortgage Brokers and Tax Advisors should work hand and hand. So let me extend my hand and say, if you have any tax related questions, please contact your Tax Advisor or CPA.
In the meantime……check out Bankrate’s great online tax guide.
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