tax deduction for the single family home mortgage?
by Mortgage Rates on Monday, September 20th, 2010 | 6 Comments
-
Mortgage Info
-
Updates
-
Useful Links
-
-
Tags
2010 About article Auctions bank banks best Business buyers change Credit Debt Equity Financial First fixed Foreclosure From good Government Help Home house Housing interest Loan Loans Market more Mortgage Mortgages Need News options qualify Rate Rates refi refinance Refinancing should this Time variable would-
Meta
you are allowed to deduct the interest payments that you made on your loan for the entire year and on the year you close you can deduct closing costs also
max is based on maximum of 1 million orig purchase price I think – in the first full year of mtg payments, you’ll be able to take 12 months mtg INTEREST plus Real estate taxes paid, plus state and local income taxes paid from your paycheck – that’s typically the bulk of what most people can claim
You cannot take the standard deduction if you want to deduct home mortgage interest (and other allowable itemized deductions). You must choose one or the other.
As for the maximum amount of mortgage interest you can deduct, I don’t know, but at some point, you may be subject to the Alternative Minimum Tax (AMT) if you have excess deductions. Contact a qualified tax preparer.
I think there is one major thing you’re over-looking.
The started deduction for married filing jointly is $10,700.
If you choose to deduct your mortgage interest, you’ll have to itemize your deductions and not take the $10,700 standard deduction.
You need to go through a Schedule A and total up all of the deductions you can take. If it doesn’t come to more than $10,700, you’re better off just sticking with the standard deduction.
You can’t claim both the standard deduction and itemize deductions – its one or the other. The interest you pay on your home mortgage will be a deductible expense.
You could take the mortgage interest and real estate taxes as itemized deductions on your tax return, and that would most likely bring your itemized deductions above the standard. You don’t get to take both though – if you itemize, then you do NOT also get the standard deduction.
The maximum is based on the value of the mortgage, not the amount of deductions it generaltes, and with a $400K home you are well within the limit.