Three M’s to Know at Tax Time

Mortgage interest of up to $1 million in debt, incurred while purchasing or building your primary residence or second home is eligible to be deducted at tax time. If you borrow from a home-equity line of credit, any interest you pay on up to $100,000 can be deducted, no matter how you spend the money.

Taking a new job that requires relocation can incur expenses. Some of these expenses may be deductible at tax time, as long as your new place of employment is 50 miles more than you would travel between your old home and your old job. If it’s your first job, then the place of employment must be further than 50 miles from your home. Some of the expenses you may deduct include travel and lodging expenses for your family while moving, and the cost of relocating your household items. You are eligible to take this deduction even if you don’t itemize your expenses on your tax return, and instead opt for the standard deduction.

Multiple-Support Agreement

Generally, in order to claim a person as a dependent you must provide half of their support for the tax year. In cases where two different taxpayers are responsible for providing half the support of a dependent, a multiple-support agreement is made to determine which taxpayer will claim the dependent and the others forfeit the right.