Mortgage interest write-off on income of $100K?

Question

My annual income including from my rental property comes up to be around $100,000 this year.
-I contributed $7,000 to my 401K
-Other deductions (pre-tax...health care, FSA, etc)

Not including rental income my post-qualified deductions...my income will be $70,000
Mortgage interest on my primary house is $2300/month or 27,000/year.
Mortgage interest for my rental property is $1000/month or 12/yeaa.

How do I deduct mortgage interest from my earned income on the fax filings?
How much of difference will write-offs "save" me?
Thanks.

BabuRabu

Answer 1

You deduct mortgage on your primary home on schedule A. Your rental property mortgage is deducted from the income you made on the rental property on schedule E. There are too many variables (children, other income, other credits, other deductions) to tell you exactly how much the write-offs will save you. You can get a GENERAL idea by dividing your adjusted gross income (line 37 on 1040) by your total tax (line 63) this is your actual tax rate. Multiply that number by your write-offs and this is APPROXIMATELY what you will save.

Answer 2

How much ? will depend on your final AGI but the Rental income will go on its own worksheet and should have a section for business expenses (inc the % on the loan).
Your primary % is $27K ? or is that your whole note ?
Anyways, whatever, it will be much more than the standard deduction so go with it.
Kind of sounding like you have never filed 1040 long form before so go to:

http://www.irs.gov/ and get started reading !

good luck

Answer 3

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