Article Date:
January 2016

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Be Alert to Tax Rules That Destroy Mortgage Interest Deductions

You know, as a reader, that the alternative minimum tax (AMT) is a stealth tax. Lawmakers installed the AMT to steal deductions granted for your regular tax return and then tax those deductions in the AMT calculation.


What happens is this: You prepare your regular tax return. Then, if you are like most taxpayers, you logically think that’s it.


But that’s not it, thanks to big changes made by the Tax Reform Act of 1986. Your regular tax deductions next come face-to-face with a second layer of tax law, the AMT. And the AMT more often than not defies logic and denies a variety of deductions you properly claimed on your regular tax return.


As you will learn in this article, some parts of your mortgage interest deduction can suffer the additional taxes caused by the AMT.


And when it comes to your home mortgage, the tax code gives you a double dip of surprises: First, the AMT is often one surprise for the mortgage interest deduction. Second, the regular rules contain for many taxpayers a surprise impediment to deducting mortgage interest.


What could this double trouble mean for you? The regular tax or AMT rules could take away your mortgage interest deductions.


Don’t let that happen. Know the rules. Identify the trouble. Make a plan. This article gives you the directions you need to protect your home mortgage interest deductions. ... Log in to view full article.

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