Beware of the Mortgage Tax Deduction
Last week I wrote this short piece for the Boston Globe’s website series on tax planning for 2013 (it’s never too early!):
“For many of us, the mortgage tax deduction provides the single largest reduction in taxable income.
With mortgage interest rates continuing to be very attractive, it makes sense to consider refinancing your mortgage, if you have not already done so.
A mortgage refinance has the potential of reducing your payments, and improving your cash flow. It will also reduce reduce your mortgage tax deduction, and therefore increase your taxes due. Make sure to adjust your tax withholding so that you won’t owe taxes (and interest and penalties) as a result of refinancing.