The standard IRS deduction for couples filing their tax return jointly is $12,600 independent of the value of any mortgage that may be encumbering the couple. So if the couple has a combined income of $100,000, the standard deduction alone will reduce their taxable income to $87,400. This is the route most American homeowners take since $12,600 usually exceeds the annual mortgage interest accrued. BTW Donald Trump is trying to push through a $30,000 standard deduction!!
John Bernard of South Portland wrote that only mortgages of one million dollars or higher are eligible to itemize their mortgage interest on their federal tax return. My tax professional told me any mortgage interest is potentially deductible; it is just that in the majority of the cases that the sum of monthly interest payments in a mortgage is invariably lower than the standard deduction.
Currently, mortgages of $1 million or more are eligible for the deduction. Reducing that threshold to $500,000 would save significant money at the federal level, money that could then be spent on ending homelessness. In Maine, fewer than 1 percent of home mortgages are valued at greater than $500,000.
Practically, we need only take a step back from the politics of this issue(rarely is it possible to take a “Step Back” from the politics) to consider the common sense inherent in reforming the mortgage interest deduction, a program that economist after economist labels as ineffective in encouraging homeownership.(Sounds as though John has mortgage of over 500 thousand but less thana million)
Do our nation’s needs dictate more tax breaks for those at the highest income levels or a commitment to affordable homes for those struggling to survive? I hope Maine’s congressional delegation speaks out on this important issue.(To what extent is it the government’s duty to look after those who are struggling to survive? When the Dems were in power, government played big role. Now that the GOP is locked in and dominating, more indolent people will have to get off their ass and work)