Tax deductions on mortgage interest were introduced in the year 1913. This was a stepping stone for home ownership in the years to come. Taxpayers could deduct mortgage interest from the tax amount payable, thereby reducing the taxable income. If you want to enjoy tax benefits on mortgage interest, the following rules have to be followed:
– You have to file Form1040 with all deductions itemized on Schedule A.
– You should be legally liable for the loan. Any interest paid on behalf of another person will not be counted
– You should pay interest for a “Qualified home” that is, the house should have all the basic features such as a living room, a bedroom, a kitchen and so on. This also includes a second home, or condominium, or mobile home.
– If your mortgage payment is on your second home, interest can be deducted from the taxable income for only one ‘second’ home, and you should have occupied the house for at least 14 days during a year.
– At the time of the Internal Service Audit, you should submit a copy of form1098, provided by your mortgage firm.
Considering the tax benefits, a home loan can be an easy solution to reduce your taxable income. This gets easier for a veteran, as VA guaranteed loans are easily available with no down payments. VA Loan Captain can help you obtain VA Home Loans at competitive interest rates. To know more, please visit: www.valoancaptain.com