Most homeowners know that interest paid on a mortgage can be tax-deductible.  But, with careful planning, a homeowner can increase his 2005 tax deduction.

Because mortgage interest is paid in arrears, the payment due January 1, 2006 is really for interest accumulated throughout December 2005. 

And it's only tax-deductible in the year in which it was paid.

So, rather than make the mortgage payment on January 1, 2008, a homeowner can send the payment in a few days early (i.e. in 2005) and render that payment tax-break-eligible in 2005 -- the year in which it was paid.

As always, consult your tax professional before making any tax planning decisions.

Dan Green is an active loan officer. Email or call 513-443-2020. Dan is on Twitter at @mortgagereports.