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Press Release
ERPWeb.NET Awarded Defense Finance and Accounting Service (DFAS) Cognos Software Contract
ERPWeb.NET’s contracting vehicles allows government agencies to buy solutions with significant savings.
Miami, FL August 4, 2004 -- ERPWeb.NET an 8(a), SBD Information Technology Consulting...
Refinance Mortgage Rate and Mortgage Rates
Refinance mortgage rate is the best rate available to qualified homeowners for refinancing their current home mortgage. Refinance mortgage rates vary from product to product and customer to customer. A consumer with excellent credit will qualify...
Refinancing Your Home Loan? When Should You Refinance Your Home?
If you have a current mortgage and are unhappy with the interest rate or the amount of the monthly payments, it is possible to refinance your home and eliminate your problems. But before you call your lender, there are some questions that you should...
Rental Property - Refinance, Don't Sell
You own a rental property for years, and never see the "big pay-off." Is it time to cash in on your investment, now that you've paid down the mortgage, and values are up? Maybe not. The Problem With Selling Selling means you'll have to pay a...
To Refinance...or Not, That Is The Question???
What does it mean to refinance? Why would someone want to refinance? There are many cases when a person would refinance. When we use the term refinance, we are typically referring to a loan such as a car or house loan. It may also be a business...
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Deducting Points On Home Refinances
Any points that you pay in the refinancing of your residence are tax deductible over the length of the loan in question. The deduction is allowable only if the residence is your primary home and the new mortgage replaces a previous one and/or is used to improve the residence. To the extent that money is taken out to pay off credit cards and non-residence costs, the points may not be used as a tax deduction.
Big Deductions By Refinancing Twice
If you refinanced your primary residence twice during 2004, you may be in for a very nice surprise. A significant tax deduction can be created when you refinance twice in one year. If you refinance a mortgage, you accelerate the deductible amount of points from the first mortgage and may claim the points from the first mortgage all at once.
As an example, assume that I refinanced my home in January 2004 and paid $3,000 in points. Interest rates continued to drop through 2004 and I then decided to refinance again in August. Because I paid off the original loan with the refinance, I am able to accelerate the value of the points of the January loan.
So, what tax deductions have I created
for my 2004 filing period? Initially, I am going to deduct a percentage of the points off of my latest refinance. The deduction will amount to the total amount of points paid divided by the total months of the loan. This will not be a big deduction, but every little bit helps.
In addition to this amount, however, I will also deduct the full $3,000 in points that I paid on my January 2004 refinance! I am able to claim this deduction because I "accelerated" the deductibility of the points by paying of January mortgage with the August refinance.
By refinancing twice, I get a lower interest rate and a healthy tax deduction. Ah, the value of owning a home.
About the Author: Richard Chapo is CEO of http://www.businesstaxrecovery.com - Obtaining tax refunds for small businesses by finding overlooked tax deductions and credits through a free tax return review.
Source: www.isnare.com
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