Hi, I just bought a house on March 2005, and I filled my 2005 tax return through TaxCut software. I have almost $6000 on the form 1098 for mortgage interests, through the software, I only got $1500 refund, does this make any sense. I am married and filled the return separately, since my wife is on tax exempt status for 2005. My wage on W-2 is around 40000, and my federal tax withhold is around $4700. Thank you in advanced for any advice.
2006-08-21 05:17:31 · 7 answers · asked by ezstudio2006 1 in Business & Finance ➔ Taxes ➔ United States
i have nothing against computer tax returns but i have always found that going to a professional (human) is much better idea. especially since you jsut bought your house, which you are allowed to claim your interest of your home for the next ten years, plus your clsoing costs can also be deductible to an extend. also you did included your wife name even though you file separately her information needs to be included on the filing. do you have any kids? yes you pay more for taxes if you married.
i think you got too little back, but there are other things that you need to consider. i would give you more details but i need to know more information. if anything even if you dont pick my answer write me through my nickname at yahoo.com and i will give you some very good tips which are all legal. because even though if you pay the i.r.s. too much , they are not going to turn around and say, "hey you pay us too much, let us give you some money back".
2006-08-21 05:31:04 · answer #1 · answered by lasalle_1986 4 · 0⤊ 0⤋
That sounds about right. Even though you claim $6,000 for your mortgage interest, the government is only going to give you just a small portion of it back. Try to compare your 2005 return with your 2004 return to see what the difference is in return and that is approximately how much of a refund you got from the government due to paying interest on your mortgage.
2006-08-21 05:25:00 · answer #2 · answered by potatochip 7 · 0⤊ 0⤋
Deductions (such as mortgage interest) only reduce your taxable income. So your example is not unreasonable.
Very simplistic example:
$40k income @ 10% tax rate = $4k taxes
$40k income - $6k deduction = 34k taxable income @ 10% tax rate = $3,400 taxes
So that $6k only resulted (in my extremely simplistic example) in a $600 reduction in taxes.
Obviously I don't know what other factors you have.
But also, you have the complicating factor of Married filing separately, which might pigeon-hole you into other filing requirements that may not fully work to your tax benefit.
2006-08-22 10:12:56 · answer #3 · answered by nova_queen_28 7 · 0⤊ 0⤋
Taxes are complex. Your mortgage interest is only a piece. If you don't trust the software, find an accountant.
2006-08-21 05:23:53 · answer #4 · answered by M S 4 · 0⤊ 0⤋
if you're married, your prevalent deduction is $11900, purely $one hundred less than your own loan interest in case you probably did not have more beneficial to declare on the Sch A the position you enter the private loan interest the version in any refund will be very minor
2016-11-05 07:32:55 · answer #5 · answered by ? 4 · 0⤊ 0⤋
all these answers are great...I would only add that married filling seperate is usually less beneficial...did you do a married filing joint return to see if there was a difference?
2006-08-22 13:20:30 · answer #6 · answered by Eddie C 2 · 0⤊ 0⤋
mortgage interest only reduces your taxable income, what you claim is not the refund you'll be getting back.
2006-08-21 07:42:36 · answer #7 · answered by emjay 4 · 0⤊ 0⤋