claiming mortgage interest on income tax (property taxes, showing, work)

[diamondgirl45]

Is it true that in the US you can claim back your interest that you pay on your mortgage on your income tax? If so how much of it do you actually end up getting back?

[djmilf]

Yes, you can claim a mortgage interest deduction on your Federal Income Tax form.

No, you don't get your entire interest paid back from the Federal Government.

You'll have to file a 1040 tax form with itemized Schedule A showing individual tax deductions. You can also claim state/local income taxes OR general state/local sales tax paid (but not both) as another tax deduction on Schedule A.

It's only of benefit to file a 1040 with an attached Schedule A if your itemized deductions are greater than the standardized deductions allowed to you on a 1040A or a 1040EZ.

Either itemized or standard deductions serve to lower your Adjusted Gross Income on your 1040/1040A/1040EZ. The lower your AGI, the less tax that you'll pay. Also, there are actually six federal tax rates:

• The first $0 - $8,025 of income is taxed at 10%
• The next $8,025 - $32,550 of income is taxed at 15%
• The next $32,550 - $78,850 of income is taxed at 25%
• The next $78,850 - $164,550 of income is taxed at 28%
• The next $164,550 -$357,700 of income is taxed at 33%
• The remaining $357,700 and above is taxed at 35%

If you didn't claim your deductions, then your AGI would be higher, and the difference between AGI with deductions and AGI without deductions would be taxed at the highest rate for which you qualify.

[diamondgirl45]

So, from what I understand it doesn't make a huge difference. It might lower your income tax by about 3% over all.

[djmilf]

Assuming your AGI is $30,000 and your interest deduction is $5,000, then you'll save $5,000 X 15%, or $750 off your Federal Income Tax.

Or if your AGI is $70,000 and your interest deduction is $10,000, then you'll save $10,000 X 25%, or $2,500.

Or if your AGI is $200,000 and your interest deduction is $20,000, then you'll save $20,000 X 33% or $6,600.

I'd pick that up if I found it laying in the street.

[diamondgirl45]

Definitely! It is just that in Canada we were under the impression that you got most of the interest that you paid back....not saying it is accurate, but that is what is believed.

[jma021582]

Yes. I am not a tax professional but, I am a mortgage banker in michigan. It depends on a few factors. You can call me at work 800-226-6308 ext 51796

[Rapunzll]

We can also claim our property taxes. :-)

[Coldjensens]

In some states you also deduct your morgage interest and property tax from AGI for state taxes as well. It can be very significant.

However at certain income levels (very high) you lose your deductions. I amnot sure what that income level is, but I know people who have hit that level and then they do nto get to deduct anything.