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Just got my 1098 (or whatever the form number is). It shows the total interest I paid on my mortgage during 2000, but then throws part of it away because the payment was not due until 2001. Why? I was prepaying my mortgage payments to get ahead, but I seem to be losing the "benefit" of deducting the interest. It also seems that I will not be able to deduct this interest at a later date either. Seems as though you can only deduct mortgage interest in the year it is paid and only for 12 payments. Is this right? I sure thought I read a Fool letter one time that said to make an extra house payment if you want to lower your taxes for the year. If I remember this correctly, it doesn't seem to agree with tax code. Can someone offer some input as to how this works and if the additional payment interest can be deducted? Thanks.
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