Real Estate Unit

Archive for the ‘Taxes’ Category

What is the Mortgage Interest Deduction and Who Benefits from It?   The mortgage interest deduction helps make homeownership more affordable by allowing home owners to deduct the interest that they pay on the mortgage for their home when calculating their annual federal income tax.

Contrary to assertions by some economists, the income tax deductions for mortgage interest and real estate taxes primarily benefit middle class taxpayers with incomes between $50,000 and $200,000, according to the findings of a study by the National Association of Home Builders.

Taxpayers earning less than $200,000 pay 43 percent of all income taxes. However, they receive 68 percent of the total benefit of the mortgage interest deduction and 77 percent of the total benefit of the real estate tax deduction.

Moreover, larger benefits go to larger households and families, such as those with children. And as a share of household income, larger benefits are collected by families with less than $200,000 income, indicating that these tax rules make the tax system more progressive.

The Mortgage Interest Deduction is at Risk

Ever since the federal income tax was introduced in 1913, the government has used the tax code to encourage homeownership. Now, as a result of the effort to reduce the federal deficit, the mortgage interest deduction is under fire. Proposed changes to the tax code would have a dramatic impact on home owners and would significantly reduce the value of this deduction.

How would the proposal to eliminate the mortgage interest deduction and replace it with a 12 percent nonrefundable tax credit affect a typical home owner?

Suppose a home owner paying $10,000 in mortgage interest in a year faces a marginal tax rate of 25 percent and, to keep things simple, has enough other itemized deductions that they would itemize regardless of the mortgage interest deduction.

For that home owner, the mortgage interest deduction is worth approximately 25 percent times $10,000 or $2,500 in reduced taxes paid. With a 12 percent tax credit, the home owner’s tax benefit would be reduced to $10,000 times 12 percent or $1,200.

Moreover, if other proposals affecting housing-related deductions went into effect, home owners would not be able to deduct their state and local property taxes or the interest on any home equity loan they might have and they would pay higher tax on a principal residence when sold.

Are you worried about the mortgage interest deduction going away? Take action and show YOUR support for the mortgage interest deduction!

To get more information about Mortgage Interest Deduction, you can visit http://savemymid.info/

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Are you apartment renters who are looking for tax deductions? Well, in this tax season, finding tax deductions can be a perfect way to save some money on personal taxes. Unfortunately, most apartment renters don’t know that they deserve to claim deductions so that they just let their tax deductions unclaimed. Actually, as apartment renters, you can also get some deductions that will surely save you on your taxes. What you need to do is being well informed with all possible tax deduction.

In order to know what tax deduction eligible for you, you certainly have to refer to what your state offers. Different state usually has different policy related to tax deduction for apartment renters. For example, if you live in Chandler, AZ, you have to contact the local tax authorities or find Chandler property management companies to help you find out the detail information about tax deduction. If you want to save more, you can ask for additional deductions. Some people might think that this is impossible but as long as you meet the requirements, there are always ways to get additional deductions. You probably don’t know that some of your monthly payments can be deducted, do you?

Therefore, if you are motivated to get some tax deductions, you can start finding trusted information now. Either way, you can use a tax professional to help you.