Good morning! My questions: I purchased a home in Canada in October of 2022 as a foreign buyer and have been paying mortgage for this. Is this something that I should take into account when filing my taxes in the US? I have a high yield savings account, do I pay taxes on the interest I earn on my savings? How do I lower my taxable income? Thank you for helping out with tax questions, appreciate all that you do!

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asalsabil

Level 2

Question

Tax Questions

Forum|Forum|2 years ago
April 3, 2024
5 replies
20 views

Good morning!

My questions:

I purchased a home in Canada in October of 2022 as a foreign buyer and have been paying mortgage for this. Is this something that I should take into account when filing my taxes in the US?
I have a high yield savings account, do I pay taxes on the interest I earn on my savings?
How do I lower my taxable income?

Thank you for helping out with tax questions, appreciate all that you do!

Ask the Experts - MetLife IV - April 2024

RobertB4444

Level 15

1. Yes, if the home in Canada is your second home then you can deduct the mortgage interest on your tax return. Make sure to save the documentation showing the mortgage interest that you paid since it is not reported to the IRS from Canada.

2. Yes

3. If you are eligible you should be maxing out your contributions to retirement plans. If you aren't eligible to do that then you can invest in tax deferred annuities and things of that nature in order to change how you are receiving the investment income that you're earning. I recommend sitting down with an investment counselor in your area.

@asalsabil

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asalsabilAuthor

Level 2

@RobertB4444

With regards to response #1:

What does it mean to "deduct the mortgage interest" on my tax return? Does this mean I get the amount I pay in interest back?

MayaD

Alumni - Intuit

The deduction allows you to reduce your taxable income. However, you must itemize to benefit from mortgage interest tax deductions.

If you standard deduction for your filing status is higher than the total of your itemized deductions, the mortgage interest won't affect your Federal return.

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