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re: Do you think they will take away the Mortgage interest deduction?
Posted on 4/13/11 at 2:04 pm to Shankopotomus
Posted on 4/13/11 at 2:04 pm to Shankopotomus
quote:
so this would mean a significant increase in annual taxes to many families.....wouldnt you agree?
more taxes is pretty much always bad for budgets in times like these
There's no doubt that losing a known deduction means less money for certain people...the same way they enjoyed MORE money for a long period of time.
0
Posted on 4/13/11 at 2:22 pm to Tiger JJ
quote:
By your numbers, you would have been able to deduct at least SOME of them.
Do you know what the Standard Deduction is and how it works?
ETA: Helpful hint -- if you want to redo your math, you should also consider state taxes and the savings on them as well.
This post was edited on 4/13/11 at 2:29 pm
Posted on 4/13/11 at 2:26 pm to Newbomb Turk
I would say wrong board, but given the thread starter...prob should not.
This post was edited on 4/13/11 at 2:27 pm
Posted on 4/13/11 at 2:30 pm to Newbomb Turk
quote:
Do you know what the Standard Deduction is and how it works?
Of course I do. By your numbers, you implied your marginal rate was 33%. If you had $5000 of "other" deductions, that implies you had $15K of "other items" to itemize...clearly well in excess of the $11,400 married SD that I'm assuming you qualify for (if you are single, then your numbers REALLY don't make sense).
Posted on 4/13/11 at 2:35 pm to Tiger JJ
See the helpful hint.
Posted on 4/14/11 at 1:39 am to Dusty Bottoms
quote:
I don't know the full history on the interest deduction, but wasn't it put in place to encourage home ownership?
Didn't they used to allow deduction of all interest - including credit cards, car loans, etc. ... and then they changed it so only things like home loans and student loans would get it - that's what I though, maybe I'm wrong.
Posted on 4/14/11 at 9:47 am to OohPooPahDoo
Yeah I think much of that is correct....at one time in this country I believe we had it right...if you want available money to loan and you want people to borrow it all in the interest of keeping the economy moving - why not allow them to deduct the interest on taxes?
Obviously I am for keeping the deduction....the government has enough trouble trying to spend the money they already receive.
Obviously I am for keeping the deduction....the government has enough trouble trying to spend the money they already receive.
Posted on 4/14/11 at 9:52 am to kfizzle85
quote:
I would say wrong board, but given the thread starter...prob should not.
Posted on 4/14/11 at 9:56 am to Shankopotomus
Aren't you in real estate of some sort?
Posted on 4/14/11 at 9:59 am to kfizzle85
absolutely. just as you are in banking of some sort
Posted on 4/14/11 at 10:02 am to Shankopotomus
Nah, not in banking at all.
Posted on 4/14/11 at 10:05 am to kfizzle85
oh my bad, I don't know why I thought that 
you seem pretty tapped in, so what do you do? CFA I presume considering the avy....
you seem pretty tapped in, so what do you do? CFA I presume considering the avy....
Posted on 4/14/11 at 10:08 am to Shankopotomus
Accounting right now, CPA with CFA in progress (which is currently taking over my life). I'm not trying to call you out or anything. 
Posted on 4/14/11 at 10:14 am to kfizzle85
oh by no means, I don't hide it or anything. I am legit....thought you might need to hire me or something
Of course, this place is like a wasteland for people believing in the value of my real estate brokerage side - everyone around here thinks they can do it all on their own. But then posts a desperate thread every other day looking for home selling/buying advice
I love America
Of course, this place is like a wasteland for people believing in the value of my real estate brokerage side - everyone around here thinks they can do it all on their own. But then posts a desperate thread every other day looking for home selling/buying advice
I love America
Posted on 4/14/11 at 10:18 am to Shankopotomus
quote:
Obviously I am for keeping the deduction....the government has enough trouble trying to spend the money they already receive.
As long as you recognize the MID has no effect on increasing home ownership and it results in roughly the 3rd largest cost to govt as far as foregone revenue, go for it. Oh, and the people that need it least are most benefited by MID as they have additional itemized deductions to aggregate and claim. Look at various papers and IRS stats that back this. In a nutshell:
LINK
Posted on 4/14/11 at 10:42 am to Chicken
quote:
Do you think they will just target this for the so-called "wealthy" Americans making over $200,000 per year?
The pres's plan calls for limits on itemized deductions on the wealthiest 2% of Americans (I assume 'wealthiest' here means 'highest income.') Chicken must have had some inside info
LINK
Posted on 4/14/11 at 10:43 am to tirebiter
quote:
As long as you recognize the MID has no effect on increasing home ownership
Well, the MID doesn't encourage home ownership per se. It encourages having a mortgage, which isn't quite the same thing.
Posted on 4/14/11 at 10:46 am to tirebiter
quote:
As long as you recognize the MID has no effect on increasing home ownership and it results in roughly the 3rd largest cost to govt as far as foregone revenue, go for it. Oh, and the people that need it least are most benefited by MID as they have additional itemized deductions to aggregate and claim. Look at various papers and IRS stats that back this. In a nutshell:
This.
My wife and I are in the market for a house. We currently take the standard deduction. If we had mortgage interest in the price range we're looking for - we'd barely be over the standard deduction by itemizing - and we're in the 15% bracket - so it wouldn't be as big a hit to our income as someone who is in a higher bracket and/or would itemize even without the deduction.
Q: - this wouldn't change the MID for businesses, right? I don't see how it'd be logical. We're actually trying to find a duplex - so half the mortgage interest would still be deductible as business expense if they got rid of the personal MID.
This post was edited on 4/14/11 at 10:47 am
Posted on 4/14/11 at 10:50 am to Cold Cous Cous
quote:
Well, the MID doesn't encourage home ownership per se. It encourages having a mortgage, which isn't quite the same thing.
One might also ponder what influence it has on mortgage rates. Especially considering that those with the most to benefit from the MID - high income earners in a high bracket - are the bigger players in the market.
Think about it - if you're in a 35% bracket - a 5% interest rate with the MID is the same as a %3.25 rate without it - but if you're in the 10% bracket, the difference is less, or maybe not at all if you still are under the standard deduction.
So one indirect affect of getting rid of the MID may be to level the playing field - the banks will have to lower the interest rates a little bit to attract the high bracket earners - this will benefit lower bracket earners with lower interest rates (assuming they have good credit and aren't living outside their means).
This post was edited on 4/14/11 at 10:52 am
Posted on 4/14/11 at 10:57 am to OohPooPahDoo
I'm in DC now at a real estate conference & the threat to the mortgage interest deduction is real. National Association of Realtors is gearing up for a fight and is raising dues to fund their warchest. Will be an interesting fight for sure.
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