Why is home mortgage loan considered a tax benefit ? - home mortgage calc
I am planning to buy a house and wanted to know why everyone thinks that the home mortgage is the tax advantage.
For example: --
If we are to pay over 15,000 dollars a year in interest + property taxes and tax refunds (level 15% tax) return about $ 2K-3K and we are happy.
His government, which paid for $ 100 and $ 15, and thus be happy.
Correct me if I'm wrong
Friday, January 15, 2010
Home Mortgage Calc Why Is Home Mortgage Loan Considered A Tax Benefit ?
6 comments:
You are partially incorrect.
If you pay $ 15,000 per year for interest and property taxes and support 15% after taxes, you get the $ 15K of your income be reduced. This means that you have to pay $ 2250 less federal taxes. So, in other words, you pay to save $ 15K to $ 2k. It is a good business, but it's better than nothing ... saving but this is not the whole story ... It gets worse.
Simply pull the $ 15k if you details about your deductions (rather than take the standard deduction). If you are married, your standard deduction $ 11.400 ($ 5.700 that easy).
Since you pay $ 15k of interest to other taxes, you get an additional $ 3600, which otherwise would have been entitled to deduct anyway. Therefore, the net tax advantage is not really $. 2250. Only $ 540 (15% from U.S. $ 3600).
But wait ... It gets worse ...
You pay only $ 15K interest / property taxes, THE FIRST YEAR of the mortgage. Note that a portion of your mortgage payment goes to principle. Whiler the payment of each year the same amount for the principle and interest amount is towards change. Over time, the payment of $ 15k per year are only a few thousand dollars in interest ... if zero profit.
The government wants to spend money to stimulate the economy. If the economy picks up again, it will be less on the public costs in the long run.
You're right on this point that the mortgage tax and mortgages offer the convenience of having to repay the loan with a payment of tax cuts.
the interest you pay on your mortgage is tax deductible
the interest you pay on your mortgage is tax deductible
They are wrong.
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