i posted a question earlier, I must have ask the question wrong. here I go again. I brought a home this year and I want to know if I will be getting back all of the interest that I paid through my mortgage or just a percentage of the interest? I live in Florida.
2006-11-20 03:25:59 · 5 answers · asked by Cowgirl Joe 2 in Business & Finance ➔ Taxes ➔ United States
total interest that I paid was 11, 000.00
2006-11-20 03:26:39 · update #1
The interest is deductible against your income along with other itemized deductions. Your adjusted gross income minus your deductions minus your exemptions brings you to taxable income. Your taxable income tells you what tax bracket you are in. If you take your tax bracket times the mortgage interest paid you will arrive at how much the mortgage interest saved you in taxes. It will never be 100% of the interest paid.
2006-11-20 05:03:29 · answer #1 · answered by waggy_33 6 · 0⤊ 0⤋
Three % has nothing to do with anything on your federal tax return and you do not pay income taxes in Florida. If you itemize (schedule A) and it would appear that you should, all of the $11,000 mortgage interest and property taxes are deductible. As a new homeowner you will want to take the closing statement to you tax preparer as there may be some items on that form that are deductible as well. Be sure and keep that document for your records as it will help to determine if you have a tax liability when you sell this home. If you have not done so in the past this might be a good time to us a tax professional to prepare your return as things are a bit more complex now that you are a home owner.
2006-11-20 11:34:13 · answer #2 · answered by ? 6 · 1⤊ 0⤋
You get to take your interest paid as a deduction, not a credit. That is, you reduce your income by the amount you paid in interest and pay tax on that lower amount. You do not get to subtract the interest from the amount of tax owed. It should save you around 30% of your interest money (exact amount depends on other factors).
In other words, since you shelled that money back out on an investment, you don't count it as income. You don't get to subtract 11000 from your taxes though.
2006-11-20 11:36:18 · answer #3 · answered by wayfaroutthere 7 · 0⤊ 1⤋
hello fellow floridian. you dont get back the interest, but you can deduct the interest from your taxes. depending on your income and how much taxes you had withheld from your paychecks, you may or may not get anything back. there are a few variables so you should speak to a tax professional or use the irs.gov site for reference. good luck.
2006-11-20 11:39:18 · answer #4 · answered by ny2fl 2 · 0⤊ 0⤋
You don't actually get the taxes back directly. You do get to deduct it against your income for the year so you end up paying less income tax that way as your income is lower.
2006-11-20 11:40:20 · answer #5 · answered by Anonymous · 0⤊ 0⤋