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Pay January mortgage now to get added interest deduction

If you're still looking for ways to reduce your 2011 tax bill, consider making your January mortgage payment now instead of early next month.

Accelerating your house payment even by just a day will get you an additional tax deduction on your Schedule A for the interest paid. And that advice earns it recognition as the last Weekly Tax Tip of 2011.

No, it's not prepaid interest, which usually isn't fully deductible in the tax year in which it's paid.

Unlike rent payments, which you give to your landlord upfront to cover your upcoming occupancy period, house payments are made at the end of your lived-in month.

So your payment to the bank on the first of each month covers the previous 30 or so days.

And that means the interest you're paying a tad early now is for December.

Of course, paying it now instead of January means you'll have to do the same thing this time next year if you want to keep your itemized deductions bumped up as much as possible.

But if the extra interest deduction will help trim this year's taxes, it's probably worth getting your January mortgage payment in ASAP.

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