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Old 04-28-2008, 07:16 AM
 
167 posts, read 1,373,956 times
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I used an online calculator to find morgage interest. It shows that if I borrow $300,000, I will be paying around $16,500 on interest. The first year savings will be $6,000. Is this a true estimate ? If not please let me know how to estimate that.

Thanks
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Old 04-28-2008, 07:29 AM
 
Location: Lexington, MA
250 posts, read 831,055 times
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The best way to figure out how much you'll save on the deduction is to mock-up a pro-forma tax return, both with and without the deduction in question and look at the difference. That will give you a fairly accurate estimate. Anything else is a seat-of-the-pants estimate at best and a swag at worst.
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Old 04-28-2008, 07:33 AM
 
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You need to add up all your allowable itemized deductions. Interest, taxes of various kinds, charitable contributions, misc. itemized deductions, etc.

Then you subtract your allowable standard deduction for your filing status and then multiply the leftover amount by the approx. tax rate you are in for your income. This is the amount of "savings" in taxes you get.

Always remember the standard deduction since this is an amount of deduction you get when you don't itemized your actual interest and such.

Example: Total itemized deductions $22,000 minus about $10,000 for the standard deduction equals $12,000 extra, multiplied by 25% (dont know your actual tax rate) and so $4,000 would be the tax reduction in this example. Yours could be more or much less depending on your actual tax return. For example if you have a bunch of kids and have a very small or no tax rate, the deduction is not worth as much.

So you see, you need more personal information to be accurate. You can find additional info on itemized deductions and tax rates at Internal Revenue Service.
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Old 12-13-2008, 04:26 PM
 
Location: Blackwater Park
1,715 posts, read 6,285,020 times
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Interesting thread. I thought I'd comment here instead of making my own.

I'm trying to determine whether it would be more beneficial to put extra money into a high-yield MMA/savings account or put it towards paying off the mortgage.

At a minimum, I would think I would need to find an investment that had a rate of return of about 4.75%.

The interest on my mortgage is 4.75%, but after taxes I would assume it would be more like 3.25-3.5%. Then again though, I would like to be more precise.
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Old 01-15-2009, 02:49 PM
 
Location: Chino, CA
1,458 posts, read 2,897,907 times
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Since it's almost tax time..... I was wondering if for owner occupied property do you take both the Mortgage Interest paid AND the Real Estate Taxes paid to determine the total amount available to deduct or are you only allowed to deduct the Interest paid, but not the Real Estate Taxes paid?

So if Interest is:
14k

and Property taxes paid for the year was 4k

Can you only deduct 14k... or would you be able to deduct 18k? Or there's different rules for both.

Also, how bout Home Improvement costs? Are those something calculated on the tax year incurred, or something calculated when you sell the house and subtracted from Capital Gains?

Thanks so much for any information!
-chuck22b
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Old 01-16-2009, 10:33 AM
 
Location: Casa Grande, AZ (May 08)
1,490 posts, read 3,339,995 times
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Chuck,

Get into turbotax online. You can start a return for free (they dont charge unless you file) and plug in all the scenarios. My understanding is that for 2008 you CAN deduct real estate taxes as reported on your 1098 form from your lender, but I am NOT a tax professional.

I have another question for anyone here with experience? I bought my home this year using FHA and paid Up Front Mortgage Insurance of $2100+. My 1098 from lender only shows the total of my mortgage insurance monthly payments. I ve seen conflicting information as to whether the UFMIP is deductible or not? If it is, where do I put it? I dont want to just add it to the 1098 amount because that might flag the IRS because it will be different?
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Old 01-16-2009, 11:24 AM
 
16,700 posts, read 18,909,509 times
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I think Obama is trying to change the tax code so that mortgage interest is deductible even if you are taking standard deductions... we will see how "far" he gets with that idea...
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Old 01-16-2009, 12:05 PM
 
Location: Chino, CA
1,458 posts, read 2,897,907 times
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Quote:
Originally Posted by sh9730 View Post
Chuck,

Get into turbotax online. You can start a return for free (they dont charge unless you file) and plug in all the scenarios. My understanding is that for 2008 you CAN deduct real estate taxes as reported on your 1098 form from your lender, but I am NOT a tax professional.

I have another question for anyone here with experience? I bought my home this year using FHA and paid Up Front Mortgage Insurance of $2100+. My 1098 from lender only shows the total of my mortgage insurance monthly payments. I ve seen conflicting information as to whether the UFMIP is deductible or not? If it is, where do I put it? I dont want to just add it to the 1098 amount because that might flag the IRS because it will be different?
Thanks sh9730 for the info, hopefully they count.

One good thing about home ownership is that tax time usually isn't as painful because of the deductions. I'm going to try to get TurboTax this weekend and hope to file my taxes in as soon as possible.

I'm hoping for a nice return this year... cross my fingers.

Yea evilnewbie, I think I saw that somewhere too... it's so that those who fully own their properties or have a lot of equity can also claim property taxes on top of their standard deductions.
http://taxes.about.com/od/deductions...rtytax2008.htm

-chuck22b
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Old 01-19-2009, 08:05 AM
 
Location: Castle Hills
1,129 posts, read 2,284,142 times
Reputation: 605
Quote:
Originally Posted by chuck22b View Post
Since it's almost tax time..... I was wondering if for owner occupied property do you take both the Mortgage Interest paid AND the Real Estate Taxes paid to determine the total amount available to deduct or are you only allowed to deduct the Interest paid, but not the Real Estate Taxes paid?

So if Interest is:
14k

and Property taxes paid for the year was 4k

Can you only deduct 14k... or would you be able to deduct 18k? Or there's different rules for both.

Also, how bout Home Improvement costs? Are those something calculated on the tax year incurred, or something calculated when you sell the house and subtracted from Capital Gains?

Thanks so much for any information!
-chuck22b
Yes, you can claim both. If your mortgage interest is 14k & your real estate (property taxes) are 4k then you can claim 18k.

You can write off a few home improvements but not many. See below this shows some of them.

Home Improvements that You May Use as a Tax Deduction - Associated Content
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