How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Tax.appeal.168 Your Own Question

Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 2567
Experience:  Nearly 30 years of varied tax industry exp. Tax Biz owner
58285678
Type Your Tax Question Here...
Tax.appeal.168 is online now
A new question is answered every 9 seconds

Is the interest portion of a mortgage payment tax deductib

Customer Question

Is the interest portion of a mortgage payment tax deductible?
Submitted: 3 years ago.
Category: Tax
Expert:  Tax.appeal.168 replied 3 years ago.
Hello, THANK YOU for choosing Just Answer. My goal is to help make your life...a little...LESS taxing.

Thank you for requesting my assistance. Yes, the interest as well as property taxes are tax deductible. Please note that the deduction is not a dollar for dollar deduction. It is a percentage.
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 2567
Experience: Nearly 30 years of varied tax industry exp. Tax Biz owner
Tax.appeal.168 and 2 other Tax Specialists are ready to help you
Expert:  Tax.appeal.168 replied 3 years ago.
In addition to what I previously wrote, points and depreciation is deductible as well.
Customer: replied 3 years ago.
Hi Angela,

What the deduction is a percentage of what? How exactly does that work?
Expert:  Tax.appeal.168 replied 3 years ago.
Hello again,

To accurately calculate the numbers you have to take into consideration the total amount of your itemized deductions, as itemizing is the only way that you can take the mortgage interest deduction. Please note that tax deductions are not tax credits. Tax deductions reduce your taxable income BEFORE you calculate a tax liability on that income. Tax credits, however, are applied after your tax bill has already been calculated. At that point, tax credits are similar to payments that reduce your tax bill on a dollar for dollar basis. What this means is that the deduction is not on a dollar for dollar basis. The mortgage interest deduction is a percentage.

According to the tax code, this homeowner's deductions for mortgage interest and property taxes would be evaluated at a 15 percent marginal tax rate. Non-housing itemized deductions (i.e., state and local taxes, non-mortgage interest and so on) is estimated at $2,000 and the standard deduction for 2011 is $ 5,800 for individuals whose filing status is single or who file married filing jointly and $11,600 for couples who file married filing jointly. You can figure what your own costs and savings will be by substituting your own tax figures for those on the chart.

Listed below is an example of how the mortgage interest deduction is calculated. Again, because I don't know what your itemized deduction amount is, there is no way to accurately calculate the numbers at this time. Itemized deductions are reported on the Schedule A. SEE BELOW

http://www.irs.gov/pub/irs-pdf/f1040sa.pdf

--------------------------------------

Homeowner Profile

Gross Income..............$200,000
House Price/Mortgage Size.$950,000 - $450,000 down = $500,000
Loan Type.................30-year Fixed Rate mortgage at 4.6%
Property Tax .............$9,600
Filing Status.............Files jointly/two exemptions

Example of the impact of the Mortgage Income Tax Deduction
on Annual Homeownership Costs:

Before Tax Homeownership Costs:

Mortgage Interest........................$23,000
Property Taxes...........................$ 9,600
Total of Before Tax Homeownership Costs..$32,600
Itemized Deductions:

1. Homeownership Deductions

Mortgage Interest..............$23,000 (yearly based on the loan amt.)
Property Taxes.................$ 9,600 (yearly)
Non-homeownership Deductions...$ 2,000 (yearly)
Total..........................$34,600

2. Standard Deductions=$11,600 (MFJ)

Total Itemized Deductions=$???

Multiply TOTAL Itemized Deductions by Marginal Tax Rate (15%) to get Homeownership Tax Savings:

$??? x .15 = ???

After Tax Homeownership Costs = Homeownership Tax - Before Tax Savings.

Please note that over the years the mortgage interest amount will change due to you paying it down, but as with most mortgage loans, the interest is paid at the front end. The majority of your payments will be going towards interest instead of your principal in the first few years of the loan.
Expert:  Tax.appeal.168 replied 3 years ago.
the standard deduction for 2011 is $ 5,800 for individuals whose filing status is *single or who file married filing jointly and $11,600 for couples who file married filing jointly.

CORRECTION:

*single or who file married filing jointly --s/b who file married filing SEPARATELY.

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
 
 
 
Chat Now With A Tax Professional
Tax.appeal.168
Tax.appeal.168
Principal
2271 Satisfied Customers
Nearly 30 years of varied tax industry exp. Tax Biz owner