This tax season, my household is claiming themortgage tax deduction.
Last year, we paid a lot in mortgage interest – more than we ever have as homeowners.
However, the hefty amount we paid can help lower my tax bill.
Since we withdrew money fromour 401(k), we expect to owe the IRS money this year.
I’m a self-employed freelancer, and I find the software functions well for my home andbusiness taxes.
Plus, it helps me findhomeowner deductionsand credits I qualify for by asking straightforward questions.
Here’s how the mortgage interest deduction works and how it will lower my tax bill this year.
What is the mortgage interest deduction?
Themortgage interest deductionallows homeowners to deduct the interest on a qualifying mortgage they paid during the previous tax year.
The deduction can apply to your primary residence or second home, though there are some restrictions.
Your lender should provide aForm 1098, which details how much mortgage interest you paid during the tax year.
Read more:Should you itemize your taxes instead of taking the standard deduction?
Thestandard deductionfor the 2024 tax year is $14,600 for single filers and $29,200 for joint filers.
In most cases, you’re better off taking the standard deduction.
However, the mortgage interest deduction is not available to those who choose a standard deduction.
Donations to charity:Before moving, we amassed quite a few trips to our local donation center.
We’ve also tracked other types of contributions made to nonprofit organizations.
Those taxes tend to be higher compared to a primary residence.
The deduction will give us a little extra tax relief.
Considering theexpensive energy billsfor heating our new home, it’s a significant deduction.
Having someone else double-check the rules toavoid an auditand eliminate confusion is worth every penny.
