Explain the home mortgage deduction . .
The mortgage interest deduction entitles you to completely deduct the interest on your Palm Springs, California home loan for the year in which you paid it. Mortgage interest is not a dollar-for-dollar tax cut; it reduces taxable income. You must itemize deductions in order to do this, which means your total deductions must exceed the IRS's standard deduction.
Another point to remember is that the amount of interest on your loan
goes down each year you pay on your mortgage (all standard home-loan
formulas pay off interest first before significantly paying into
principal). That's why paying extra on your principal every year can
help you pay off your loan early.
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Last Updated ( Tuesday, 29 July 2008 )
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