Why You Would Want To Apply For A Mobile Home Tax Deduction?

By: Michael Williams

Just because your home is on wheels doesn't mean you can't take advantage of tax deductions such as the mobile home tax deduction. In fact as long as you pay taxes to the local government of the area in which you have parked your home you can qualify easily for the tax reduction. The reasoning behind this is, is how the Internal Revenue Service defines a home, they define it as a house, co-op, condominium, mobile home, trailer or even a houseboat. All you need is to have a sleeping area, cooking area and toilet facilities and you are a home and if you are a mobile home, can qualify for a home tax reduction.

One area they can include in the tax rebate is any mortgage interest they may have to pay. If you are a joint tax holder you can deduct the entire amount of interest, with a limit of $1 million. In order to find out how much interest there is you just have to wait until you receive your Form 1098 at the end of the year. Once you have this you know how much interest you can claim for your tax deduction. In fact the mortgage interest is probably the largest thing that can be included in the tax reduction. Any points that are due to you will be reflected on your Form 1098 and this is the amount that is deductible on your tax reduction.

You may also include in your tax deduction is what is called a home acquisition debt. This is something that the Internal Revenue Service has allowed. It is a debt that is equal to your first or second mortgage. This mortgage amount must be used to buy, build or improve on your home.

A few other things you can include under the mobile home deduction include home equity debt and property taxes. Home equity debt is any loan beyond what was spent to purchase, build or improve your home, in other words any amount beyond the original mortgage. Also when you refinance and earn points this way you can include that in your home tax deduction as well. The property taxes on the other hand are any that may have been paid to local governments to park your home.

When paying for local taxes you should do your best to remember to take advantage of federal tax benefits as well. This is because in relation to your local taxes federal tax benefits can save you even more money. That is why every mobile home owner should seriously look into taking advantage of the tax deduction if they can.

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