Mortgage Interest Tax Deduction for 2011, 2012

You could be getting a bigger tax refund if you are a homeowner. Did you know your mortgage interest may allow you to claim a mortgage interest tax deduction?

If you currently own a home you may deduct:

• Interest paid on your mortgage.

• Points on your mortgage.

Currently, you can deduct the interest paid on your first home mortgage and your second home mortgage. If you are married and filing jointly, the limitation is $1,000,000 in current home mortgage debt that is deductible.

If the interest is on a home equity loan, then the limit amount is $100,000 if you are married filing jointly. Both amounts will be cut in half if you file separately.

To qualify for the home mortgage interest deduction you must meet the following:

• The loan must be in your name

• The loan is from a qualified lender

• The loan must be on a secured debt-This means your home must be able to satisfy the debt owed

You may not take this deduction if you have paid on a loan that is not in your name, but if you are a joint owner in the property, then you may deduct the amount of interest that you have paid.

If you have paid off your loan early and received interest penalty, then you may also deduct that as well as late charge interest. As long as you have paid at least $600.00 in mortgage interest, then you should receive a Form 1098 from your mortgage lender. The statement will provide you with the interest you have paid as well as points paid.

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