Ask Me Help Desk

Ask Me Help Desk (https://www.askmehelpdesk.com/forum.php)
-   Taxes (https://www.askmehelpdesk.com/forumdisplay.php?f=320)
-   -   Can I file multiple years (advance) mortgage interest deduction? (https://www.askmehelpdesk.com/showthread.php?t=534714)

  • Dec 14, 2010, 02:53 PM
    jptax
    Can I file multiple years (advance) mortgage interest deduction?
    I'll be receiving a one-time retirement fee next year. Thus, my annual salary next year will be doubled because of this retirement fee, I was thinking of buying a house (first time buyer). Then file for advance (multiple) mortgage interest deduction.

    Can I file multiple years (advance) mortgage interest deduction?

    (I've heard that if you have a bonus or a one-time income that year you purchased a house you could file for advance mortgage interest deduction)
  • Dec 14, 2010, 02:56 PM
    twinkiedooter

    You don't file for an advanced interest deduction - you put a bigger downpayment on the loan instead. You can only do the advanced interest deduction if you already own the home and already have a home mortgage. You don't have a mortgage yet so you can't do this. And why would you want to do this when you can just put a larger downpayment down in the first place to lower your mortgage.
  • Dec 14, 2010, 03:02 PM
    ebaines

    No - you may deduct mortgage interest only in the year it is due. In fact, even if you pre-pay interest not due until later years, you must spread out the deduction across all the years it is actually due. You may want to review IRS Pub 928: Publication 936 (2009), Home Mortgage Interest Deduction
  • Dec 14, 2010, 03:59 PM
    jptax

    Twinkiedooter,
    Thank you for the input. I want to prepay mortgage interest next year (of course after buying a house) to minimize the taxable for next year. Because next year my annual income will be double because of the one-time retirement fee I will be receiving.

    I checked the net and it seems feasible. But as ebaines noted I must spread out the deduction across all the years. And I also need proper planning because in the coming years I will not be able to claim deduction.

    (Here is the link regarding prepay mortgage interest)
    PrePay Mortgage Interest Now to Avoid Taxes | Real Estate | Mortgages | Get the best rates on mortgage, home equity loans, CD, money markets and checking accounts | BankingMyWay
  • Dec 14, 2010, 04:02 PM
    jptax

    Ebaines,
    Thank you for the link regarding Mortgage interest deduction. I'll do further reading.
    Sorry, I'm new in this field and need more advice/reading to grasp the basics.

  • All times are GMT -7. The time now is 04:58 AM.