Now that a new year has begun, you can anticipate the arrival of your tax documents for 2016. Even if you don't expect to start working on your returns until the April 18 deadline looms large, you should consider whether to take advantage of a deduction for your mortgage interest.

By deducting the interest you paid on your mortgage over the previous year, you might be able to improve your financial situation. However, you'll have to itemize your taxes to take advantage of this benefit, and you may find that this process won't actually save you any money.

Mortgage interest can easily by the biggest deduction you can claim on your taxes. Evan Nemeroff, writing for the National Association of Realtors, says the interest you paid on your mortgage can be subtracted from your taxable income, lowering the amount of taxes you owe.

You can deduct this interest on several types of home loans. For example, the Internal Revenue Service says deductions will apply to interest paid on your primary home, a second home, a second mortgage, a home equity loan, or a home equity line of credit.

In general, mortgage interest has to qualify as secured debt on a qualified home. Secured debt means you have signed a mortgage, deed of trust, or other document offering the home as collateral to guarantee repayment to the lender. A qualified home is simply defined as a primary or secondary home with sleeping, cooking, and toilet facilities. As such, interest on a loan for a trailer and boat used as primary or secondary residences can be deducted.

In most cases, you can deduct all interest on a home loan. This is the case if you took out your mortgage after Oct. 13, 1987 to buy, build, or improve a home and the total debt is $1 million or less for married couples filing jointly (or $500,000 or less for singles or married couples filing separately). Interest can also be fully deducted on "grandfathered" mortgage debt from Oct. 13, 1987, or earlier.

Couples may also deduct interest on mortgages that are considered home equity debt rather than home acquisition debt. The cap for a full deduction is $100,000 for married couples filing jointly or $50,000 for singles or married couples filing separately. Your home equity debt must also be less than the fair market value of your home minus any grandfathered debt or home acquisition debt.

There are a number of situations which can make these deductions more complicated. For example, points are generally deducted ratably over the life of the mortgages, but can sometimes be deducted for a single year. Military personnel with a non-taxable housing allowance are still allowed to deduct mortgage interest. A property is still considered a qualified home if it is destroyed during the year, provided you take steps to repair or rebuild the home or sell the land where it once stood.

When you itemize your taxes, mortgage interest is listed on Form 1040 under Schedule A. This document has you fill out interest identified on Form 1098, and gives the option of putting down additional interest if you paid it to the person from whom you bought the home. James E. McWhinney, writing for the financial site Investopedia, says Form 1098 is provided by the lender who holds the mortgage. If you are making payments to an individual, you'll need to keep records of the interest paid and provide the IRS with this individual's name, address, and Social Security number.

While many homeowners opt to itemize their taxes to deduct their mortgage interest, others opt for the simpler method of using the standard deduction. Nemeroff says singles can make a standard deduction of $6,300 while the total is $12,600 for married couples filing jointly.

In order to benefit from a mortgage interest deduction, the interest paid in a year should exceed the standard deduction. Even if the mortgage interest itself isn't higher than the standard deduction, itemizing may make more sense if the total amount of individual deductions—such as property taxes and private mortgage insurance—will let you reduce your taxable income further than the standard deduction.

The mortgage interest deduction can be particularly high in the early years of the loan, when a higher share of your payments goes toward interest. As you continue to pay your mortgage, more of your payments will go toward the principal and you'll have less interest to deduct.

For this reason, homeowners often opt to take the standard deduction rather than itemize their taxes. Lisa Smith, also writing for Investopedia, says a 2005 panel on federal tax reform found that 46 percent of homeowners did not deduct their mortgage interest.

The value of your deducted interest may also be less than you expect. Rather than a dollar-for-dollar difference, you'll only be able to deduct a certain portion of the interest based on your tax bracket. It can still be more cost-effective than a standard deduction, but it may not save you as much money as you'd hoped.

Some scenarios can also make deducting mortgage interest troublesome. Tony Nitti, writing for Forbes, says the question of who can deduct the interest becomes especially nebulous if someone else purchased the property for you but you make the mortgage payments. You may be able to deduct the interest if you are considered an "equitable" owner of the property despite not being listed as a borrower on the mortgage.

There have been proposals to include the elimination of the mortgage interest deduction in tax reform, but the deduction is currently still available. This is perhaps the largest deduction a homeowner can make, so it might be worth it to itemize your taxes to realize this benefit. Consulting with an accountant can help you decide whether it is better to deduct your mortgage interest or stick with the standard deduction.