Pay January mortgage now to get added interest deduction

December 29, 2011

If you're still looking for ways to reduce your 2011 tax bill, consider making your January mortgage payment now instead of early next month.

Accelerating your house payment even by just a day will get you an additional tax deduction on your Schedule A for the interest paid. And that advice earns it recognition as the last Weekly Tax Tip of 2011.

No, it's not prepaid interest, which usually isn't fully deductible in the tax year in which it's paid.

Unlike rent payments, which you give to your landlord upfront to cover your upcoming occupancy period, house payments are made at the end of your lived-in month.

So your payment to the bank on the first of each month covers the previous 30 or so days.

And that means the interest you're paying a tad early now is for December.

Of course, paying it now instead of January means you'll have to do the same thing this time next year if you want to keep your itemized deductions bumped up as much as possible.

But if the extra interest deduction will help trim this year's taxes, it's probably worth getting your January mortgage payment in ASAP.

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The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

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Those procrastinating filers aren’t a problem. In fact, the IRS appreciates taxpayers who take time to fill out their 1040 forms correctly. It also is grateful that tax submissions are spread out a bit, especially now that the IRS is a leaner agency. Processing returns is easier when they arrive throughout the year instead of in massive bunches.

But enough about Uncle Sam’s tax collection issues. The focus now is on all y’all who filed for extensions, giving you another six months to complete your return. Since your new mid-October due date will be here before you know it, let’s get started now on meeting it.

The ol’ blog is here to help you finish up your extended Form 1040. You can start with January’s tax tips page, which has links to the rest of the year’s tips by-month collections. You also can peruse various tax categories for more tailored advice by clicking on the More Tax Posts drop-down menu at the top of this (and every) page.

And to make sure you don’t miss your new filing deadline, the count-down clock below will let you know just how much time you to file by Oct. 15. At the latest.e. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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