Mortgage Deduction

[feh]

True, but the comment said the middle class would be crushed. I don't think of the middle class when I think of mansions and really expensive markets.

Neither do I. I wasn't attempting to contradict your statement.

[disneysteve]

Not a new concept at all. The majority of Americans live beyond their means.

Don't forget:

In a recent survey, 56 percent of Americans said they have less than $1,000 in their checking and savings accounts combined, Forbes reports. Nearly a quarter (24.8 percent) have less than $100 to their name.

There are a ton of people who right about now are planning on how to spend their tax refund. So it is true that suddenly taking that away would have an impact, though hopefully that impact would be to force people to be more responsible with their money. I know that might be wishful thinking, though.

[StormRichards]

Not a new concept at all. The majority of Americans live beyond their means.

Don't forget:

In a recent survey, 56 percent of Americans said they have less than $1,000 in their checking and savings accounts combined, Forbes reports. Nearly a quarter (24.8 percent) have less than $100 to their name.

Our country continuing to subsidize their idiocy is not doing them any favors.

[StormRichards]

There are a ton of people who right about now are planning on how to spend their tax refund. So it is true that suddenly taking that away would have an impact, though hopefully that impact would be to force people to be more responsible with their money. I know that might be wishful thinking, though.

Definitely wishful thinking.

A large portion of them are spending that refund on things they have no business having considering the state of their finances.

[feh]

Our country continuing to subsidize their idiocy is not doing them any favors.

You may be conflating two distinct groups. I don't know what the intersection is of people w/ less than $1000 in cash with those that itemize their mortgage interest.

[StormRichards]

You may be conflating two distinct groups. I don't know what the intersection is of people w/ less than $1000 in cash with those that itemize their mortgage interest.

With 56% of the population with less than $1,000 in their checking/savings, I suspect that there is some level of intersection.

[corn18]

As one who is currently benefiting greatly from the mortgage interest deduction, I would be ok with it going away IF the gov't put all the extra taxes towards paying down debt AND passed a balanced budget law.

[MooseBucks]

With 56% of the population with less than $1,000 in their checking/savings, I suspect that there is some level of intersection.

I would agree that there is some overlap. I believe about 30% of tax filers itemize deductions.

[LivingAlmostLarge]

We've always itemized the deduction. But we've lived in HCOLA so our mortgages have been outrageous. Part of the lifestyle and we were not living high off the hog. Just the hog for a house was expensive. Other than our house we lived very frugally. So don't judge until you've walked in people's shoes.

But that being said I wasn't considering it for most personal residences. I was wondering if it would affect people who invest in properties as landlords who itemize. They get to write off depreciation. They likely also mortgage their own places and leverage while buying more. There are a lot of people who carry mortgages for leverage but can afford to pay off because of the deduction.

I am curious if you think it'll affect prices as all.

[MooseBucks]

But that being said I wasn't considering it for most personal residences. I was wondering if it would affect people who invest in properties as landlords who itemize. They get to write off depreciation. They likely also mortgage their own places and leverage while buying more. There are a lot of people who carry mortgages for leverage but can afford to pay off because of the deduction.

I am curious if you think it'll affect prices as all.

A mortgage for an investment property is an expense and you aren't itemizing the interest. I wouldn't think it would have any impact on still including mortgage payments as an expense for investment properties.

[StormRichards]

We've always itemized the deduction. But we've lived in HCOLA so our mortgages have been outrageous. Part of the lifestyle and we were not living high off the hog. Just the hog for a house was expensive. Other than our house we lived very frugally. So don't judge until you've walked in people's shoes.

Regardless if someone is living high off the hog or frugally, if losing this deduction has a major impact on their finances they bought a house they couldn't afford. I don't need to walk a mile in anyone else's shoes to realize that.

[LivingAlmostLarge]

No deducting the expense is easy if you live in a place with high property taxes or state income taxes even with a small mortgage deduction.

Unless you decide to leverage your primary residence to help fund buying the investment properties? Or leave it leveraged to buy or pay down investment properties?

[MooseBucks]

Unless you decide to leverage your primary residence to help fund buying the investment properties? Or leave it leveraged to buy or pay down investment properties?

At that point you wouldn't be able to deduct the mortgage interest then. I also must be pretty risk adverse because I never understood leveraging your primary residence to buy additional rental properties.

[~bs]

In a high COL area or in areas with high property tax or state income tax it makes a big difference. And I did factor it into my home buying.

Couldn't find a recent return, but I pulled up an old return. I itemized $18000, which is far more than the $5950 standard deduction.



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The people most negatively impacted might be the people that just bought a house or considering buying one.

[amarowsky]

I read that Trump's plan was to cap the mortgage interest deduction indirectly by capping how much taxpayers could itemize. Then I read elsewhere that the Congressional GOP is planning to raise the standard deduction to the point that it wouldn't be worth it to itemize for most taxpayers, which would effectively render the mortgage interest deduction meaningless. Who knows. It's speculation at this point.

For my situation raising the standardized deduction would be beneficial (especially with my career change).

I was under the influence that this would just remove it as a deduction option, not increase the standardized deduction overall. If this is true, and I'm not missing a huge part of the proposed tax change, this would increase and greatly simply calculating my tax refund/payment.

According to a motley fool article I read, they're considering moving the standardized deduction from $6,300/12,600(married) up to ---> $15,000/30,000(married). And removing head of household.

I think this would be a absolute benefit to me, because between my wife and I's income we are hovering right around the $95-105K income. And our interest is only like $2400 with some other small deductions. Since I'm done with school and can no longer claim cost of living while working out of town (majority of my deductions)... I really think this new plan would prove to be beneficial.

Here's a link to current deduction information from 2016 irs.gov