If I use internet banking to make loan payments on 12/31, will my tax statements include these payments even though it is a Sunday?
Research with the IRS indicates you are entitled to claim any interest that you paid in 2006 if you mail the payment before midnight on New Year's Eve, regardless of when your mortgage loan is credited with the payment. Of course, you can't claim that interest in 2007, even if it's included in the 1098 form your receive at the end of 2007. As with all things relating to taxes, we also suggest you check with a tax advisor.
As for making the paying with internet banking, we're not sure whether you can claim interest from a payment that won't be recorded on your checking account until 1/2/2007. To be on the safe side, you might consider --
(1) Doing your bill payment on December 27 or 28, to ensure it posts to your checking account in 2006; or,
(2) Making the payment the (shudder) old-fashioned way, by paper check, and drop the check in the mail before midnight on New Year's Eve.
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