Debt Consolidation

Custom Search
 

Debt Consolidation
Debt Relief
Mortgage
Credit
Bankruptcy
Adverse Credit Mortgage
Buying a Home
Online Mortgage Calculators:
Buying a Home
Mortgage Loans -
The Hidden Influence
The Tangled Web
20 Percent Down?
Mortgage Refinancing May
Bad Credit Mortgage
Foreclosure - Dodging
Buying a Home
What Seniors Should
The Risky Gamble
Fixed Rate Mortgage
How to Obtain
Home Equity Loans
Bad Credit Home
High Risk Mortgage
Refinance After Bankruptcy
Fixed vs Adjustable
How to Get
Own Your Home
The Real First
Finding Home Loans
Home Mortgage Loans
Poor Credit Mortgage
2nd Mortgage Loan
Bad Credit Home
Buying a House
Home Equity Loans,
Mortgage Refinance and
Real Estate Mortgage
Comparing Home Equity
Online Mortgage Refinance
Sitemap
Debt Consolidation
Debt Relief
Mortgage
Credit
Bankruptcy
 
Understanding Second Mortgages and Tax Deductions
by Carrie Reeder
Second mortgages have different tax deductions than an initial mortgage. The government places limits on the amount and circumstances that paid interest can be deducted. The following principles will give you a general understanding of the rules.

Second mortgages have different tax deductions than an initial mortgage. The government places limits on the amount and circumstances that paid interest can be deducted. The following principles will give you a general understanding of the rules. However, you should check with a tax preparer for specific recommendations for your own tax situation.

Interest That Can Be Deducted

In general any mortgage interest you pay in a particular year can be used as a deduction for that years taxes. This can include interest on a second mortgage, home equity loan, or home equity line of credit. You must be liable for the loan. And only first and second home mortgage interest qualifies as long as you live on the property.

Of course there are exceptions. If you are building a home, you have 24 months to deduct interest even if you arent living in the house. You can also deduct interest on destroyed property for a period of time.

Homes that are rented out are seen as investments. Their interest cannot be deducted under this rule.

Late payment and early payment fees are also considered “interest payments” by the IRS and can be included in the deductible amount.

Limits On Deductible Amounts

The government places a variety of limits on how much you can deduct on additional home loans. For loans used to fund home improvement projects, the debt limit is $1 million ($500,000 for those married but filing separately). There are also time limits on when the funds must be used. The total loan amount, which could include other loans, must not exceed the fair market value of the property

The interest on home equity loans used for other purposes, such as paying for college or consolidating debt, is also deductible with exceptions. Currently, the limit is a maximum of $100,000 or $50,000 for those married but filing separately. And the fair market value rule also applies.

How To Deduct Your Interest

To deduct your mortgage interest, you will have to file a Form 1040 with itemized deductions. Your financing company will send you Form 1098 listing your paid interest. If you paid more than the amounted stated, you can attach a statement to your tax form explaining why.

IRS Publication 936 explains circumstances for home mortgage interest deductions. This deduction is subject to changes, so check for updates.

See my recommended Home Mortgage Refinance Lenders for the lowest rates online.

Carrie Reeder is the owner of ABC Loan Guide, which offers help finding low rate home mortgage loans.

 
The site is not responsible for any content in it. E-mail: alldir[at]gmx[dot]com
debt consolidation, home loan, mortgage, debt free, debt help, refinance, equity loan, unsecured, secured debt, bankruptcy, credit card , bad credit, payday, cash advance, cash settlement, line of credit, student loan, interest rate, borrow money, car loan, adverse credit, compensation, quote, credit score, consolidate debt Max Hale's location Prior Lake Minnie township Buffalo Wyndmere Waverly Balance of Hopedale township Varnado village Allen township Charleston Huron township Enosburg Falls village Grand View-on-Hudson village Shambaugh Evart Northumberland County Mount Holly Jonesboro town Hartington Balance of Lawrence County Binghampton township Dimondale village Rose Hill town Pleasant Valley township Harris town Eau Claire borough Morton borough Zillah Balance of Moniteau County USA UK Australia Canada Somalia Thailand El Salvador Sao Tome and Principe Gabon France Falkland Islands (Islas Malvinas) Netherlands Antilles Uruguay Croatia Middlesex Ayrshire Glamorgan Leicestershire Northamptonshire Perthshire Flintshire Wigtownshire Rutland Dumfriesshire Colorado (CO) Nebraska (NE) Florida (FL) North Carolina (NC) Missouri (MO) South Carolina (SC) New Jersey (NJ) Alaska (AK) Alaska (AK) Virgin Islands (VI) Delaware (DE) Louisiana (LA) Ohio (OH) Maryland (MD) North Carolina (NC) Washington (WA) Washington (WA) Massachusetts (MA) Illinois (IL) North Dakota (ND)