On an intrest only mortgage, Can I make Jan 08 payment in Dec 07 so I can claim the extra intrest on 07 taxes?
I'm really in need of additional deductions this year. Can I have 13 payments in one year?
I'm really in need of additional deductions this year. Can I have 13 payments in one year?
spicertax
Favorite Answer
See page 14 at this link on prepaid interest. OK to take the January payment in 2007 but not February.
http://www.irs.gov/pub/irs-pdf/p936.pdf
ninasgramma
Mortgage interest that is due January 1 is for the month of December. So paying the interest in December is fine. You can deduct it in 07.
You couldn't deduct the interest due Feb 1 08 in 2007 by paying in December 07, as this interest is for the month of January 08.
The 1098 you receive from your mortgage company or bank will show all interest paid in 2007, including the early payment you made in December.
Anonymous
Sure you can make the payment for Jan 08 in Dec 07 but you can't claim it on 07 taxes.
asktheknowitall
What??? Some of these answers are dangerous.
You certainly can make the payment early. As an individual, unless you for some uncommon reason elected the accrual method, you are cash basis taxpayer. This means - you report income when received (or constructively received) and deductions when paid.
Thus, pay interest-get a deduction when PAID!
YoungGirl
Yes Yes Yes!!!!!!!! The irs wants to know how much interest you paid in 2007. As long as you paid it in 2007, it is ONLY deductible in 2007. They don't even see whether all the payments are made over 12 months, 6 months or whatever.