2020 tax season has officially begun. If you are a homeowner preparing to file your return, be sure to take advantage of the mortgage interest deduction. By January 31st of each following year, your mortgage company is required to send you a copy of Form 1098 (also known as the Mortgage Interest Statement). This valuable tax break allows you to reduce your taxable income by the amount of money you’re paid in mortgage interest (including points) during the year.
Mortgage interest on first and second homes is generally deductible for taxpayers who itemize their deductions. With the new laws which took effect beginning of last year, this crucial deduction only covers interest paid on loans of up to $750,000, or $375,000 if you’re married but filing a separate return.
In case you haven’t saved all your receipts and you pay your bills and purchases electronically, you should be able to print out the entire year of itemized statements and potentially deductible expenses. You can use a software system such as QuickBooks to help to keep your accounts in order. In any case, consult your tax professional to find out exactly what else you can deduct. and have all receipts and documents ready.
February 4, 2020