Making your January mortgage payment early could reduce your upcoming Internal Revenue Service bill, according to Bankrate.
Mortgage and rent payments work slightly differently from one another. Unlike rent, which is paid for the coming month, your mortgage payment goes towards the previous month. (i.e., your January 1st payment actually represents interest for the month of December.) Therefore, by making your January payment by the end of the year, you can qualify for an extra tax-break on your bill for the coming year.
That means by making your January 1st payment just one day early, you get an additional deduction for the interest paid.
However, don't get too greedy with this idea. Generally, prepaid interest is not tax deductible and you can only deduct the interest for that year. Though one extra payment for the month of January is allowed.
You'll want to be sure if mailing in your payment to get it post marked in time to arrive at your lender by year's end. If you pay online, make sure the payment is set up in time for your interest to be credited to the 2013 year.
If done correctly and in time, the added interest will show up on the annual statement you'll get from your lender in late January, usually a Form 1098 or an IRS-acceptable substitute.
In short, if you have the ability to make your mortgage payment early, do so. Even if it is just one day earlier, by December 31st. In the long run you'll be a lot happier when it comes April 15th and your IRS bill is much lower.