Year End Tax Saving Strategies

The basic rule for saving on your individual taxes is to either defer income or to accelerate deductions. One tip to accelerate your deductions for 2017 is to prepay your January 2018 mortgage payment in December. Make sure you pay your January payment on time so that your mortgage company properly reports the interest on tax Form 1098. If you mail in your payment makes sure to mail it in at least 2 weeks before the end of the month.

You can only make one extra mortgage payment in 2017, do not try to prepay February’s mortgage payment. Unlike rent which is paid at the beginning of the month, your mortgage payments are made at the end of the occupancy period. That means your January 2018 mortgage payment represents interest for the month of December. This is what makes this an eligible tax deduction for 2017. Before you decide to make the payment, you should also check to make sure doing so will not impact AMT.