8. Claim your deduction for pre-paid interest on a new mortgage
When you get a mortgage on your own home, you are actually allowed to buy points. These Points minimize the interest rate you pay and are essentially prepaid interest.
If you buy points on a mortgage, you can claim a tax deduction on the cost. You’re allowed to deduct mortgage interest on up to $750,000 of mortgage debt, so you can claim a credit for the full value of points if your debt is below that level.
You can deduct the points in full in the year you purchase them if you meet several requirements, including using your mortgage to acquire a new home or improve your home. If you took out a refinance loan and didn’t use the proceeds for home improvements, you can deduct the points on a prorated basis over the life of the loan.
1 thought on “8 Tax Tips You Should Definitely Take Advantage of This Year”
how much tax should I take from my check if I am an independent consultant and make 2080 per week when I work?