ContentDesk via ContentDesk Direct) April 13, 2006 — Each year more than two million people overpay their income taxes because they miss simple deductions. Some of the most commonly overlooked tax deductions are those that Uncle Sam provides homeowners.

Mortgage interest is the most obvious deduction.”Your primary residence qualifies unless: - The mortgage balance exceeds $1 million. - You took out a mortgage for reasons other than buying, building or improving your home. ” Late payment charges or prepayment penalties for paying off your mortgage early may be deducted as home mortgage interest too. ” Interest on a home equity loan may also be tax-deductible, but the deductible amount is generally limited to the interest paid on your loan up to $100,000. Property/real estate taxes.

If real estate taxes arent included, review your cancelled checks to determine the total real estate tax deduction. Points paid on a mortgage if: ” The home loan is for your primary residence and it was used to buy, improve or build the home; ” Paying points (and the amount of points paid) is not an irregular practice in the sellers geographic area; ” Points are computed as a percentage of the loan principal; ” Points are clearly outlined on the buyers settlement statement; and ” The cash you put into your home purchase is at least equal to the points charged.

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