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# Write-offs take bite out of taxes
- URL: https://www.smdp.com/write-offs-take-bite-out-of-taxes/
- Published: 2007-02-28T16:00:00.000Z
- Updated: 2026-10-24T23:27:18.000Z
- Author: Guest Author
- Tags: Opinion, Santa Monica, #archive-import

*By Jodi Summers Days on the Market*

Long before we elected him Governor — and probably before he was an American citizen — body builder turned actor Arnold Schwarzeneggar noted, “From the time they get up in the morning and flush the toilet, they’re taxed. Then they go and get the cup of coffee, they’re taxed...This goes on all day long. Tax, tax, tax…”

Taxes are painful, yet regrettably a part of being an American, which also includes life, liberty, the pursuit of justice and the need for government taxation.

Thankfully, Uncle Sam is kind to homeowners,giving mortgage payers tax deductions that are not available to renters.

If you’re lucky enough to own your primary residence, there are pages of deductions you can fill out on your tax forms to save some big bucks. ■ Deducting your mortgage interest. Homeowners get the perk of deducting all of the interest they pay on mortgage balances of $1 million or less ($500,000 if married filing separately).

Tax director John Battaglia, of Deloitte & Touche’s Private Client Advisors Group, observes that if you’re in the 30 percent tax bracket, and can afford $1,000 a month for your home before you take mortgage interest into account, that amount is actually $1,240 after taxes. Figure, if $800 of that $1,000 payment is mortgage interest, as it can be in the early years of your mortgage, you’ll get 30 percent of that $800 back from the IRS, or $240\. ■Maximize your home office deductions. If you have your own business and run it regularly and exclusively from your home, you can deduct certain home office costs.

The government allows individuals to deduct various utilities, repairs, maintenance and other upkeep-related expenses.New furniture or equipment for the office are deductible when they are physically installed (not just purchased) by Dec. 31\. These deductions can all be taken on IRS Schedule C. ■Have a home equity loan? Deduct the interest.

The amount of interest you pay on a home equity loan up to $100,000 is always deductible.

“It doesn’t matter what you spend that loan on,” Battaglia said. “You can go out and borrow $100,000 against your home, spend it on anything, even a vacation — and you can deduct the full amount of interest you pay on that loan.” ■If you refinance your mortgage, deduct the points.

“When you refinance, you may end up paying a mortgage point — that amount is fully deductible,spread out over the life of the loan,” said tax agent Tony Bardi.

“Points” are chunks of the mortgage interest that are paid up front, rather than over the life of the loan.

Lenders may offer points in exchange for a lower interest rate overall. If you previously refinanced your mortgage and were deducting points over the life of the loan, you can deduct the remaining amount in the year you refinanced again. ■Prepay your January mortgage payment. “If my clients are looking to get a little extra deduction, I tell them to pay their January mortgage installment in early December, so that it’s credited by Dec. 31,” said Bardi. “That way they can deduct the interest on that payment as well.”

FYI – Beyond putting the check in the mail, the payment needs to be processed by the end of the year. ■Ensure your property tax payment is processed by Dec. 31.

Pay the second half of your property taxes in December; if the state has processed your check before the end of the year, then you can deduct your tax payment. ■Is a 1031 exchange right for you? This is a great perk if your own more than your primary residence. According to IRS Code 1031, you can swap similar properties and defer any tax payment.

If you have a rental property worth $200,000 and want to exchange it for another income property of equal or greater value, you can do so without paying any capital gains tax.

Be sure to talk to your accountant to see which benefits are right for you.

*Originally published in the Santa Monica Daily Press print edition on February 28, 2007.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/022807.pdf?ref=smdp.com)