Quick Tip To Increase Your Mortgage Interest Deduction For 2013
You can boost your 2013 tax deduction by simply making your January mortgage payment a week or two early. It’s that simple. You see, mortgage interest is calculated based after it is borrowed. For example, your January mortgage payment is a reflection of mortgage interest accrued in December.
By making January’s mortgage payment in December, eligible homeowners can apply the interest paid in January 2014 to their 2013 Tax Returns instead of waiting another year to claim the same deduction. Since many of my clients are first-time home buyers or have restarted their mortgage term due to a HARP 2 refinance, most of their monthly payment consists of primarily interest presenting an even greater opportunity to maximize their deduction!
There is a little strategy to this concept. You must get your payment to your mortgage lender in plenty of time for them to process the payment prior to January 1. I recommend giving your lender at least 10 days to process the payment. I personally send my early payment in on the 23rd of December to be safe.
Disclaimer: Although many King County and Snohomish County homeowners qualify for this tax deduction, I recommend talking to your tax professional first. Not every homeowner is eligible for this tax benefit. More importantly, the “early payment” strategy may not be the best option for you depending on your tax payer profile.
If you have any questions, or would like me to refer you to a professional tax advisor, please feel free to message me below, or contact me directly at firstname.lastname@example.org or (425) 350-7136.