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It follows then that they are being allowed to take deductions for expenditures they didn't actually make. This would normally qualify as an example of tax fraud.
You are not typical. Unless you have a high level of other deductible Schedule A expenses, such as property taxes or charity the interest on a mortgage under $200K is not usually enough to overcome the standard deduction hurdle. The mortgage interest deduction is definitely biased to the middle/upper middle class.
Of course. I surpass the standard deduction with just property tax and state tax.
1/2 of homeowners can not exceed the standard deductions .
You're looking at it from the wrong direction. The question you should be asking is what percentage of homebuyers will take the deduction. Homebuyers = demand. Homeowners = supply.
It follows then that they are being allowed to take deductions for expenditures they didn't actually make. This would normally qualify as an example of tax fraud.
I am pretty sure Mathjak meant that 1/2 of homeowners do not have itemized deductions that exceed the standard deduction, so they take the standard deduction.
So a couple has maybe $10K in itemized deductions, but they deduct $12,700 anyway. How is that not deducting $2,700 worth of expenditures that they did not actually make?
that is the beauty of the standard deduction , especially for a couple and most renters benefit the most .
they get to fly the empty seats tax wise and get money back they never spent . the homeowner likely did pay in a portion of real estate taxes and mortgage interest and if they can't exceed the standard deduction tax wise the renter likely did better from a tax perspective .
if it wasn't for our medical and the fact all our insurance is in after tax dollars now we would never clear the standard deduction in retirement because we rent . even living in the highest taxed city and state wouldn't help us .. so renters tend to get more back then they paid in deductible expenditures .
ny state is especially nice with their standard deduction of almost 16k for a couple plus we get a 1600 tax credit for our long term care policy .
So a couple has maybe $10K in itemized deductions, but they deduct $12,700 anyway. How is that not deducting $2,700 worth of expenditures that they did not actually make?
Correct. But it's not tax fraud, like you stated. It's what most people do.
from the Tax Foundation
Feb 22, 2016 - 68.5 percent of households chose to take the standard deduction
You're looking at it from the wrong direction. The question you should be asking is what percentage of homebuyers will take the deduction. Homebuyers = demand. Homeowners = supply.
You're looking at it from the wrong direction. The question you should be asking is what percentage of homebuyers will take the deduction. Homebuyers = demand. Homeowners = supply.
Quote:
Originally Posted by freemkt
DING DING DING we have a winner!
This is ignoring the fact that this has been the trend for a good while so all those homeowners were buyers and could very well be buyers again you know after they are sellers.
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