Mortgage Deduction

[msomnipotent]

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.

I have last year's return handy. We itemized over $30,000. Of that, almost $12,000 was property taxes and $12,000 was mortgage interest. We didn't think about the mortgage deduction when we bought, but it is going to suck for us. Yes, we live in a HCOL area.

[clatoden99]

Not being able to deduct any mortgage interest will significantly affect what mortgage payments buyers are willing to sign up for, so existing home owners are going to take a hit both in cash flow and in resale value of their homes.

[~bs]

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

The scary thing is that if they move the SD up to that level for everyone, everything else remaining constant, the fed govt would take in much much less money. This would effectively blow the deficit through the roof unless there's an offset somewhere else, an increase of tax rate, or something. Where is the offset going to be? Are they increasing taxes on the rich? The poor? National sales tax?

[TexasHusker]

Investing due to tax benefits is akin to buying bottled soft drinks so you can make money returning the bottles.

[~bs]

Investing due to tax benefits is akin to buying bottled soft drinks so you can make money returning the bottles.

You buy rental properties correct? You don't take into consideration the deductible expenses such as depreciation, utilities, mortgage interest, and other expenses? Or do you just assume that you'll be paying taxes on the gross rent amounts?