Question:

Are mortgage payments tax deductible?

Answer:

Well, mortgage payments are tax deductible to a greater extent, compared to rent payments. Homeownership has in fact a lot of tax benefits - mortgage points, mortgage interest and property taxes are all tax deductible.

The biggest mortgage payment tax deduction is interest.

The interest paid over the life of the mortgage is tax deductible under certain conditions.

Your mortgage has to be on a primary residence or a second home. Those can be a house, a boat, a trailer - anything that has basic sleeping, cooking and WC facilities.

Every year a homeowner will receive a 1098 form from the lender with the interest paid over the year. Interest will be fully or partially tax deductible.

Borrowers can deduct interest paid in mortgage payments for total home acquisition debt up to $1 M. Interest is deductible on home equity debt of up to $100,000. Different tax rules apply to purchases and refinances.

When it comes to itemizing deductions, it is recommended that you use a Certified Public Accountant (CPA) services to file tax returns in accordance with the Internal Revenue Service (IRS) rules and regulations.

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