{"id":4572,"date":"2020-11-09T15:53:00","date_gmt":"2020-11-09T15:53:00","guid":{"rendered":"https:\/\/wwwstaging.keesdeboekhouder.nl\/hypotheekrenteaftrek-hoe-zit-dat-als-je-ondernemer-bent\/"},"modified":"2024-11-04T11:09:23","modified_gmt":"2024-11-04T11:09:23","slug":"mortgage-interest-deduction-how-does-it-work-when-youre-self-employed","status":"publish","type":"post","link":"https:\/\/www.keesdeboekhouder.nl\/en\/mortgage-interest-deduction-how-does-it-work-when-youre-self-employed\/","title":{"rendered":"Mortgage interest deduction: how does it work when you\u2019re self-employed?"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"4572\" class=\"elementor elementor-4572 elementor-3629\" data-elementor-post-type=\"post\">\n\t\t\t\t<div class=\"elementor-element elementor-element-32ce3b8 e-flex e-con-boxed e-con e-parent\" data-id=\"32ce3b8\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-c7fa222 elementor-widget elementor-widget-text-editor\" data-id=\"c7fa222\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><strong>A welcome guest to your mortgage advice party is the mortgage interest deduction. A wonderful way of lowering your mortgage costs. But what exactly is mortgage interest deduction? And how does it work when you\u2019re self-employed?<\/strong><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-2ea9c24 elementor-widget__width-initial elementor-widget-divider--view-line elementor-widget elementor-widget-divider\" data-id=\"2ea9c24\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"divider.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-divider\">\n\t\t\t<span class=\"elementor-divider-separator\">\n\t\t\t\t\t\t<\/span>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-1608eec e-flex e-con-boxed e-con e-parent\" data-id=\"1608eec\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-17e696b elementor-widget elementor-widget-text-editor\" data-id=\"17e696b\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<section class=\"text-block block columns-1\"><div class=\"container\"><div class=\"row\"><div class=\"col-12 offset-lg-1 col-lg-10 offset-xl-2 col-xl-8\"><div class=\"text-block__text-wrapper rich-text d-block\"><p><strong>What is mortgage interest deduction?<br \/><\/strong>Simply put, a mortgage is a loan at the bank to buy a house. And when you loan money, you pay interest. When you\u2019re buying a house this is called: mortgage interest. The mortgage interest deduction is a government measure that decreases the amount of income tax you pay. As an entrepreneur the mortgage interest deduction lowers your taxable income and in result you pay less taxes. You could say the mortgage interest deduction is a way for the government to encourage people to buy houses. Because the more affordable it is to buy a home, the more people are able to do so.<\/p><p><strong>When are you entitled to mortgage interest deduction?<\/strong><br \/>Housing prices are high and the mortgage interest relief is a nice bonus for many households. Since 2013 there are some conditions stated to be entitled to mortgage interest deduction.<\/p><p>First you have to pay back the loan in thirty years. Second you also have to have either an annuity mortgage or a linear mortgage. An annuity mortgage has the same monthly costs for the whole repayment period. At the beginning of the period your costs will consist of mostly interest and a small amount of repayment. By the end the repayment is relatively large and the amount of interest is small. With a linear mortgage you\u2019ll pay the same sum for repayment every month. This means you\u2019ll pay less interest every month, which will decrease the total amount of mortgage costs each month. The monthly costs for a linear mortgage are higher than the costs of an annuity mortgage in the first period but are lower in the final period.<\/p><p>The mortgage interest deduction is a deduction in box 1: income from work en home ownership. This means you can deduct the paid interest from your taxable income from employment, but also from profit you make as an entrepreneur. In other words: both employees and entrepreneurs are entitled to mortgage interest deduction.<\/p><\/div><\/div><\/div><\/div><\/section>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-7ac182f e-con-full e-flex e-con e-parent\" data-id=\"7ac182f\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t<div class=\"elementor-element elementor-element-51d2987 e-con-full e-flex e-con e-child\" data-id=\"51d2987\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t<div class=\"elementor-element elementor-element-2062253 elementor-widget elementor-widget-image\" data-id=\"2062253\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img fetchpriority=\"high\" decoding=\"async\" width=\"800\" height=\"992\" src=\"https:\/\/www.keesdeboekhouder.nl\/wp-content\/uploads\/2020\/11\/rich-tervet-NiGlB_LallYKdB2020-3-826x1024.jpg\" class=\"attachment-large size-large wp-image-3634\" alt=\"\" srcset=\"https:\/\/www.keesdeboekhouder.nl\/wp-content\/uploads\/2020\/11\/rich-tervet-NiGlB_LallYKdB2020-3-826x1024.jpg 826w, https:\/\/www.keesdeboekhouder.nl\/wp-content\/uploads\/2020\/11\/rich-tervet-NiGlB_LallYKdB2020-3-242x300.jpg 242w, https:\/\/www.keesdeboekhouder.nl\/wp-content\/uploads\/2020\/11\/rich-tervet-NiGlB_LallYKdB2020-3-768x952.jpg 768w, https:\/\/www.keesdeboekhouder.nl\/wp-content\/uploads\/2020\/11\/rich-tervet-NiGlB_LallYKdB2020-3-1239x1536.jpg 1239w, https:\/\/www.keesdeboekhouder.nl\/wp-content\/uploads\/2020\/11\/rich-tervet-NiGlB_LallYKdB2020-3-1652x2048.jpg 1652w, https:\/\/www.keesdeboekhouder.nl\/wp-content\/uploads\/2020\/11\/rich-tervet-NiGlB_LallYKdB2020-3.jpg 2021w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-0d57984 e-con-full e-flex e-con e-child\" data-id=\"0d57984\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t<div class=\"elementor-element elementor-element-475b030 elementor-widget elementor-widget-text-editor\" data-id=\"475b030\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><strong>The entrepreneur, the taxable income and mortgage interest deduction<br \/><\/strong>The mortgage interest deduction isn\u2019t a simple present from the government, but more like a discount with one important condition: you have to pay income tax to receive it and lower your taxes. For entrepreneurs this means you need to make a profit. But what if you didn\u2019t make any or much profit in a certain year (2020, anyone?)? Then your paid mortgage interest can\u2019t be deducted from your taxable income and you won\u2019t benefit from the mortgage interest deduction. When your profits differ a lot from year to year, check if \u2018middeling\u2019 is an option.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-b39eb8e e-flex e-con-boxed e-con e-parent\" data-id=\"b39eb8e\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-faf34db elementor-widget elementor-widget-text-editor\" data-id=\"faf34db\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<section class=\"text-block block columns-1\"><div class=\"container\"><div class=\"row\"><div class=\"col-12 offset-lg-1 col-lg-10 offset-xl-2 col-xl-8\"><div class=\"text-block__text-wrapper rich-text d-block\"><p><strong>Paying taxes as an entrepreneur vs. as an employee<br \/><\/strong>When you\u2019re an entrepreneur you pay taxes at the end of the tax year. When you\u2019re an employee you pay taxes every month, because your employer withholds it automatically before paying your salary. Because of this, it may seem like you have to pay tons of money to the tax authorities while people in employment get money back when they do their taxes. In reality you only get money back from the Tax and Customs Administration (Belastingdienst) when you paid too much taxes.<\/p><p>This is the reason why people in employment get a monthly restitution from the Tax and Customs Administration (Belastingdienst). Their employer has already withheld the income tax from their salary. Because mortgage interest deduction lowers the taxable income, they pay too much taxes. They receive their money back monthly* using a tax advance. When you apply for a tax advance as an entrepreneur you can also benefit monthly from this deduction. Normally you can pay your advance income tax monthly. Because of the mortgage interest deduction your taxable income is lower and your monthly amount is lower.<\/p><p>*Of course the mortgage interest deduction can also be deducted at once at the end of the year when you do your declaration of income tax.<\/p><p><strong>From employment to entrepreneurship<br \/><\/strong>When you\u2019re a homeowner and you\u2019re starting your own business, it\u2019s important to stop your monthly restitution. As an entrepreneur your income tax will no longer be withheld from your income automatically. This means you will receive a tax restitution that you\u2019re not entitled to and you\u2019ll need to pay it back at the end of the year when you do your tax declaration.<\/p><\/div><\/div><\/div><\/div><\/section><section class=\"image-block block\"><div class=\"container\"><div class=\"row\"><div class=\"image-block__image-container col-12 offset-xl-1 col-xl-10\"><div class=\"image-block__image-wrapper\"><div class=\"rotated-label\"><strong>A fiscal partner instead of profit<br \/><\/strong>If you\u2019re self-employed, you bought a house by yourself, you don\u2019t have a contract for domestic partnership with your significant other and you did not make a profit in a certain year, then you have to pay your mortgage interest all by yourself. But when you do have a fiscal partner (that made a profit or has an employment) then you might be able to work something out. You are fiscal partners when you bought a house together, are living together with a domestic partnership contract or when you have a child together. In that case you can apply the mortgage interest deduction to the taxable income of your partner. So even though you didn\u2019t make a profit, you can still benefit from the tax advantage called: the mortgage interest deduction.<\/div><\/div><\/div><\/div><\/div><\/section>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>A welcome guest to your mortgage advice party is the mortgage interest deduction. A wonderful way of lowering your mortgage costs. But what exactly is mortgage interest deduction? And how does it work when you\u2019re self-employed? What is mortgage interest deduction?Simply put, a mortgage is a loan at the bank to buy a house. And&#8230;<\/p>\n","protected":false},"author":3,"featured_media":3631,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[41],"tags":[],"class_list":["post-4572","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-keep-up-en"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Mortgage interest deduction: how does it work when you\u2019re self-employed? - Kees de Boekhouder<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.keesdeboekhouder.nl\/en\/mortgage-interest-deduction-how-does-it-work-when-youre-self-employed\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Mortgage interest deduction: how does it work when you\u2019re self-employed? - Kees de Boekhouder\" \/>\n<meta property=\"og:description\" content=\"A welcome guest to your mortgage advice party is the mortgage interest deduction. 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