Tax Tip #2: Paying Interest on a Mortgage

With the tax deadline around the corner, we thought we would provide a few homeowner-related tax break tips over the next couple weeks that may help you.

#2: Paying Interest on a Mortgage

Your lender will be sending you a 1098 form that details how much interest you paid last year. Most likely your loan is less than $1 million (or $500,000 for those married but filing separately). In that case, you are allowed to deduct 100% of your interest and property taxes.

If your mortgage exceeds this, the IRS will limit the amount that you can deduct. In order to claim this deduction, however, a bit of itemization is required. To do this, you must calculate your total itemized deduction, compare it to the standard deduction from the IRS and then take whichever is higher.

Click here to view Tax Tip #1.  As always, if you have any mortgage-related questions, Crosscountry Mortgage would gladly answer them! 877-828-8851.

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Tax Tip #1: Selling your home and making a profit

The tax season is now upon us. We will be posting homeowner-related tax break tips over the next couple weeks that may help you.

#1: Selling your home and making a profit:

Congratulations! This is hard to do in this economy. Selling your home for more than you paid gives you a "capital gain". This gain that you made on your home is exempt from income taxes as long as you meet the following criteria:

• The gain is less than $250,000 single, or $500,000 for married couples filing jointly
• You owned the home for at least two years
• You lived in it for two out of the last five years before selling

If you do not meet these requirements, the IRS will only partially tax you if you had to sell your home because of one of the following:

• Death
• Divorce or legal separation
• Multiple births from one pregnancy
• Damage from a natural or man-made disaster
• Loss of a job that grants you unemployment compensation
• Change in employment that makes paying the mortgage and other basic expenses difficult
• Involuntary conversion under eminent domain law by the local government

For more specific information about this, please visit the IRS website directly.  If you have any mortgage-related questions, call Crosscountry Mortgage at 877-828-8851.

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