 Caron
Moderator
Joined: 19 Jul 2005
Posts: 1562
Location: florida
266.58 Dollars($)
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 Posted: Tue Aug 01, 2006 10:00 pm Post subject: RE: Deduct mortgage interest on tax returns |
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Hi Aaron,
You have heard correctly. Not every homeowner gets to deduct taxes on mortgage interest.
In order to deduct the mortgage interest on your tax returns, you will have to itemize the deductions. The total deduction must exceed the standard deduction allowed by the Federal government. Only then can you deduct the interest on taxes.
For the year 2006, the standard deduction allowed for single taxpayers is $5, 150, and for the head of household tax filers, it is $7, 550. For married couples filing jointly for tax returns, the standard deduction is $10, 300.
If we consider the cost of homes nowadays, tax payers usually get the chance to exceed the standard deduction when they add the property taxes and other deductions. But in certain cases, they may not be able to do so. For instance, if a buyer gets a home late in the year, he may not have made enough mortgage payments such that the deductions on the interest paid may exceed the standard deduction amount.
Thanks,
Caron. |
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Jessica
Community Mentor
Joined: 08 Jun 2004
Posts: 814
Location: OHIO
195.97 Dollars($)
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| Posted: Tue Aug 01, 2006 10:25 pm Post subject: RE: How long does the tax break last? |
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Hi Aaron,
I would like to add something to what Caron has mentioned about tax deductions.
The mortgage interest tax deductions do not last forever. The longer you occupy the property, the more you pay towards the principal loan amount rather than towards the interest. So, after a certain number of years, the deductions on interest will not be enough to exceed the standard deduction.
Regards,
Jessica.
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http://jessica.mortgagefit.com/ |
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