Steve H: What kind of tax return can I expect to get back now that I pay mortgage interest?
My wife and I just bought our first home in Los Angeles and I know that this coming tax year we can deduct mortgage interest and property tax. We both have full-time jobs, file jointly (both filed with 0 claimed dependants), and have a, before taxes, combined income of roughly $ 100k. The mortgage interest and property taxes for the year will total just over $ 30k. What kind of number could I roughly expect to get back in my taxes this year?
We don’t have any kids and no other deductable interest. Last year our return was under $ 3k.
Answers and Views:
Answer by EAA Duro
Your question is way too general. You can expect a larger return than in the past as you were only allowed to take the standard deduction I am presuming. Do you have children? Are you still paying student loans? Without seeing your 2005 tax return and not knowing what else you have the capacity to deduct this year because of going over the standard deduction and being able to use Schedule A deductions it is impossible to predict the kind of tax return you will receive. I would safely guess that you are going to get a larger return than in 2005, if you got a refund.
This answer assumes that other than buying the house, nothing else changed much from last year in income or withholding; and that last year, you took a standard deduction.
At $ 100K income, you’re probably in a 25% bracket. Filing jointly, your standard deduction last year would have been $ 10,000, so the mortgage interest and property taxes would be $ 20,000 over that. 20% of that would be around $ 4000, so you’re reasonably likely to get that much more back than last year, or $ 7000 total. If you have additional itemized deductions, you’d also probably get around 1/5 of that additional too. Whatever you pay in state and local income taxes would be additional itemized deductions; also in many cases contributions,
Please realize that this is a very loose estimate, since many things enter into the calculation and you don’t give detailed info on some of this. So don’t count on it until your final figures are in and your return done.
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