Tax question?

Question

If I put in my W4 9 witholdings I pay low taxes. but If I do not cover my liable tax amount. I will owe at the end of the year, that I undestand. Now, say I have a mortage interest of more than my liable tax amount. Does it mean that I get a refund of the amount of my interest paid minus my liable tax. Or is it that I have to have paid taxes more than the decutions in order to get the deduction.hope someone understands and has a good answer thanks

Answer 1

Mortgage interest is taken as an itemized deduction. You can either itemize, or take what's called a standard deduction, which is an amount the IRS gives you without having to prove anything. Standard deduction for last year for a married person where both spouses are under 65 was $10,000. If your mortgage interest plus any other itemized deductions adds up to over $10,000, you should itemize. If not, the mortgage interest you pay doesn't affect your taxes.

If you itemize, that amount is subtracted from your income before figuring your taxes. If you don't itemize, the "standard deduction" is subtracted instead. That's from your income, not from your taxes.

Answer 2

Your mortgae interest expense will help to lower your taxable income in turn lowering your tax. If your expenses are more than your tax you will pay zero taxes, but no refund. You can only receive a refund if they took out more taxes than they should have as federal income tax from your W2, which in this case is anything more than zero.