Question by Johnpau2012: Can we deduct the amount what we add towards our mortgage principal for taxes ?
Lets say I sent a check of 10K to my mortgage bank to add it to my principal balance.
Now this 10K amount can I show it anywhere in my tax returns ?
Do I get any return on this 10K what I have added to my principal balance apart from monthly mortgage what I have been paying?
Best answer:
Answer by rtfm
You can only deduct mortgage INTEREST on your taxes, more about ampoule not what you pay toward the principal.
What do you think? Answer below!
Unfortunately NO
You can deduct mortgage INTEREST, if you itemize, on SCH A.
Principal payments are not a deductible item.
Think this through logically: if you added 10K to your savings account, you are adding to your net worth. This is the same thing; why would you expect a refund on it?
You are not ADDING to your principal balance, you are LOWERING your principal balance.
So if you owed 100,000 on your home you now owe 90,000 and your net worth has increased by 10K.
Simple accounting Principles.
no
you get a return, it’s called equity.
Principal payments are NEVER deductible whether they are part of your normal payment or extra principal.
Paying extra principal is a great idea but you do it to reduce the amount that you owe and to increase your equity but there are no tax advantages for doing so.