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21. let's do some rough math. it's not unreasonable to pay a quarter of your income on mortgage

Thu Nov 29, 2012, 11:11 PM

Nov 2012

and nearly all of that's interest at first.

say you're in the 25% tax bracket, and you have a 6% state tax as well, so 31% combined. so now you're paying an extra 7.75% of your income on top of your regular taxes because of this deduction going away.

if they took it away entirely (which i can't imagine they'd actually do) this would be a HUGE tax increase for many of those affected.

of course i'm simplifying the math, but the point remains; this is a HUGE tax increase on many homeowners, especially those with new mortgages.

i did a dry run on turbo tax -- my own federal taxes would go from an average of 17% of my adjusted gross income to 20.5% of my adjusted gross income. this is a 20% increase in my federal tax bill. didn't even look at state taxes.

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Mortgage Interest Deduction: Not A Tax Break For The Middle Class [View all] abelenkpe Nov 2012 OP

I tend to agree. If it was a flat deduction, it would be more fair to middle class owners. NYC_SKP Nov 2012 #1

Do owners of apartment buildings get the deduction for their mortgages? gollygee Nov 2012 #2

Depends on the owner doesn't it? abelenkpe Nov 2012 #9

This stuff always seems to end up being more complicated gollygee Nov 2012 #18

No. Travis_0004 Nov 2012 #10

Thank you! gollygee Nov 2012 #15

While technically true, this answer is missleading. While apartment (or any rental property) kelly1mm Nov 2012 #17

Finally a correct answer ArcticFox Nov 2012 #32

Years and years of experience. You would be suprised what people think they know about taxes.nt kelly1mm Nov 2012 #40

I think it stinks.... ohheckyeah Nov 2012 #3

I'm happy to see it go.... mike_c Nov 2012 #4

I agree with limiting it to 1 home and having a cap. Incitatus Nov 2012 #5

It depends on the area abelenkpe Nov 2012 #8

They will probably spend their deduction in the local economy too. Incitatus Nov 2012 #11

Yeah I thought it was pretty odd too. abelenkpe Nov 2012 #14

How much do you have to make to afford a $750K home? madinmaryland Nov 2012 #12

You'd think that wouldn't you? abelenkpe Nov 2012 #13

No, you move up from a $500,000 home and apply your unearned equity. libdem4life Nov 2012 #19

gotta admit everyone I know who bought a home abelenkpe Nov 2012 #26

In the So Cal real estate business for years. Many deals were 3 and 4 legged...called "contingent" libdem4life Nov 2012 #31

Whoa abelenkpe Nov 2012 #37

In a very big way. It reduces the purchasing power of new buyers to buy the current inventory libdem4life Nov 2012 #39

This message was self-deleted by its author dtom67 Nov 2012 #6

I would be unable to afford my home without the deduction. RomneyLies Nov 2012 #7

I think most middle income folks overvalue the taxes saved through the mortgage deduction. Hoyt Nov 2012 #16

I agree with this Travis_0004 Nov 2012 #20

I don't think one could buy a garage in LA for 250,000 abelenkpe Nov 2012 #22

Price of living in a cool place. Hoyt Nov 2012 #27

No, it's the price of living where one can find a job. abelenkpe Nov 2012 #36

let's do some rough math. it's not unreasonable to pay a quarter of your income on mortgage unblock Nov 2012 #21

Not really huge. After deductions, let's say you have a taxable income Hoyt Nov 2012 #23

not huge? that's 3.5% of ALL income, not marginal income. unblock Nov 2012 #35

So one has taxable income of $300,000 -- I think they can squeeze out $10,500 in additional taxes. Hoyt Nov 2012 #41

"proposed reducing the limit on the deduction to $500,000 of a home's value" Lex Nov 2012 #24

Gee that really depends on where you live. Warren Stupidity Nov 2012 #28

you still get the deduction to $500,000 of a home's value - it's not like NO deduction Lex Nov 2012 #30

That article seems mostly wrong cthulu2016 Nov 2012 #25

Limit the deduction to only one home. nt Ilsa Nov 2012 #29

I sold my home this summer because I was underwater and got a great deal to get beyurslf Nov 2012 #33

Mortgage deductions in the 8-12% interest days in the 80s-90s real estate bubble were significantly libdem4life Nov 2012 #34

Most people can't deduct morgage interest because it isn't more than the standard deduction. L0oniX Nov 2012 #38