Homeowners may be eligible for a deduction on their federal income taxes for the interest paid on their home mortgage. To qualify for the home mortgage interest deduction, you must itemize your deductions on your tax return and the mortgage must be secured by either your primary or second home. To increase your home mortgage interest deduction, you can simply make an extra payment and apply it to the interest on your mortgage, which will reduce your tax liability.
Make an Extra Mortgage Payment
Make your mortgage payments from January to December on time.
Make your January mortgage payment before Dec. 31 but after your December mortgage payment. Review the terms of your mortgage and the rules for payments at your mortgage company to make sure that the payment will be counted as January’s mortgage payment.
Ensure that the payment will be received before the last business day of the year so that the extra interest will be counted by your mortgage company. A properly timed payment will be reflected on Form 1098, which will be issued by the mortgage company and will reflect the amount that the taxpayer may claim as a home interest deduction.
Claim Your Deduction
Fill out your Form 1040 with your name, address and contact information. You will fill out Schedule A to report your itemized deductions.
Enter the amount of home interest paid during the taxable year on line 10 of Schedule A if you received a Form 1098.
Enter the amount of home interest paid during the taxable year on line 11 of Schedule A if you did not receive a Form 1098. (Ref 3)
File your taxes claiming the home mortgage interest deduction, including the extra mortgage payment.
- Review the terms of your mortgage to determine whether there is a penalty for early payment as extra mortgage payments will eventually allow you to pay your mortgage off early.
Kay Lee began freelance writing for Answerbag and eHow in 2010. She is an attorney in Washington, DC, practicing since 2006. Lee specializes in employee benefits and executive compensation. She holds a Juris Doctor from the Columbus School of Law and a Master of Laws from Georgetown University Law Center.