My interest paid this year is $7600 is that a complete write off towards my income tax owed?
2006-11-28 07:13:17 · 8 answers · asked by johnwhetzell 2 in Business & Finance ➔ Taxes ➔ United States
Andreas is correct. Matt K is confused. Below the line means after AGI (adjusted gross income). Some deductions are limited based on AGI. Deductions not limited by AGI do reduce taxable income dollar for dollar. Mortgage interest is not reduced based on AGI. The only limit that may apply is a limit on overall itemized deductions if your AGI is greater than $150,500. There is a limit on deductions if your mortgage is greater than $1,000,000 or more than $100,000 was used for purposes other than to buy, build, or improve your home. If this applied, your interest would probably be more than $7600.
2006-11-28 11:51:09 · answer #1 · answered by STEVEN F 7 · 0⤊ 0⤋
Assuming this is on your primary or secondary home this should be fully deductible, but you must itemize in order to claim this deduction. If you are single this is fine since the std. deduction is $5150 and you would be $2550 to the better; however, if married and filing joint, then the std deduction is $10300. Unless you could find another $5150 in real estate taxes, personal property taxes, casualty losses, etc. you would be better off with the std. deduction. You should receive a form 1099 from your mortgagor showing how much interest and taxes (assuming taxes are paid through an escrow account) you paid for the year.
2006-11-28 09:17:13 · answer #2 · answered by Anonymous · 1⤊ 0⤋
Mortgage interest is an itemized deduction that reduces your taxable income. You take a deduction for the total of your itemized deductions if they exceed your standard deduction. To the extent that your itemized deductions exceed your standard deduction, you will realize a tax savings equal to the difference (between the itemized deductions total minus the standard deduction) times your marginal tax rate.
The mortgage interest deduction is not a credit that reduces your tax dollar for dollar, which I infer you meant by 100% write off.
2006-11-28 07:36:03 · answer #3 · answered by Andreas 3 · 2⤊ 0⤋
Yes, you'll receive a year end form from your mortgage company that will show you your property taxes paid and interest paid, both of which have places in Schedule B of the 1040 form for your deduction.
2006-11-28 07:16:38 · answer #4 · answered by Shogun 3 · 0⤊ 0⤋
Yes - Andreas is correct.
Although you are able to deduct (not write-off) the $7,600 from your taxable income, this will NOT actually reduce your taxable income by $7,600. Mortgage interest is a "below the line deduction", which means it does not actually reduce your income dollar for dollar.
When you complete your 1040, you will see this happen more clearly.
2006-11-28 10:06:24 · answer #5 · answered by Matt K 4 · 0⤊ 2⤋
i dont think anything is a 100% write off.. no matter how much u spend.. houses cost way too much money.
2006-11-28 07:21:22 · answer #6 · answered by joy 3 · 0⤊ 0⤋
Yes to the extent you have income. Also this has to be for either your primary or second home.
2006-11-28 07:15:48 · answer #7 · answered by Elay 2 · 0⤊ 0⤋
Some of it is for sure.
2006-11-28 07:15:40 · answer #8 · answered by Anonymous · 0⤊ 0⤋
all of it should be deductable...
2006-11-28 07:22:07 · answer #9 · answered by TC_43 3 · 0⤊ 0⤋