Question about Itemizing Mortgage Interest.?

Question

I have a question on itemizing mortgage interest on form 1040.
I bought my first home last year, when I did my taxes they said I didn't have enough made in interest to itemize my interest. I think they told me I needed $10,700? In order to itemize it. My question is, this year I have enough to itemize my interest. How much do you get back approximitly? For someone who makes about 40k a year jointly with spouse? Will it be chump change or is it a nice chunk of change?

Answer 1

Unfortunately, there is not enough info here to give you an answer that would be close to accurate.

One thing to keep in mind.....Purchasing a house isn't usually the huge tax windfall that some people (ie real estate agents and mortgage brokers) make it out to be but it will help you.

Answer 2

You'd save approximately the amount of your total itemized deductions, minus $10,700 which is your joint standard deduction that you'd get anyway, times your tax bracket which is probably 15%. So if your total itemized deductions are $14,000, you'd save around $495.

This assumes it's just you and your spouse. If you have a couple kids or for some other reason don't owe tax, you might not save anything - deductions only make a difference if you actually owe any tax.

Answer 3

Without itemizing anything, you can deduct $10,700 from your income if you file married filing jointly (the "standard deduction").

Let's say that you manage to itemize $12,700 because of your mortgage interest (and you will include other items, like state and local taxes as well). You have exceeded your standard deduction by $2,000.

Now to figure your savings, multiply $2,000 by your tax rate. If your tax rate is 15%, you have saved at most $300 by itemizing. You could say that your mortgage has saved you $300.

So, sorry, chump change for most taxpayers.

Answer 4

There is no minimum to be allowed to itemize, but if the total of all itemized deductions is less than the standard deduction, it does not result in getting back any more money.

I am guessing that you are in the 15% bracket, so 15% of the amount by which the interest EXCEEDS the amount that they told you it has to be. For example, if it is $1 more, then fifteen cents; if it is $1000 more, then $150, etc.

Answer 5

You don't give enough information to give an accurate answer.

However, if your total itemized deductions are greater than the standard deduction, then your total tax liability will be smaller than last year.

The amount of your refund/tax due will be based upon your tax withholding according to your W-4.

Answer 6

expensive Mike: sounds like you switched over employer resources to personal use resources. that is okay and now you'll declare each and each and every of the taxes and resources tax on sch A. once you promote the abode you'll recapture the previously deducted depreiation as required by ability of IRS rules. this suggestion changed into prepared in accordance to our expertise of the tax regulation in result on the time it changed into written because it applies to the info that you grant. click on my profile to study extra. Errol Quinn Enrolled Agent draw close Tax consultant

Answer 7

It ALL depends on how much you guys had withheld. That's what you'll get back. The amount you overpaid. And you will probably get 100% of that. So, If your total from "federal income tax withheld " is 5k thats what you'll get back.

Answer 8

nothing