Your Mortgage Interest Deduction May Be Changed
One of the American benefits to owning a home is the ability to deduct interest on mortgage debt including the interest paid on a home equity loan. The Congressional Budget Office is required by statue to recommend spending cuts and increase revenues. The 2010 Fiscal Year report, which was issued in August of 2009, includes recommendations to reduce the mortgage interest reduction by reducing the cap on the mortgage debt. Since 1987 the cap has been $100,000 of interest for up to $1.1 Million dollars of mortgage debt.
The recommendations include a gradual reduction from the $100,000 cap to $500,000. This would increase federal revenues. The other recommendation is to change the mortgage interest deduction to a tax credit.
A deduction can impact an individual’s tax bracket; the higher the tax bracket, the more valuable the deduction.
A Tax credit has a stated dollar value and is worth the same amount regardless of an individual’s tax bracket.
The recommendations to change from a deduction to a tax credit can have a significant impact to individual tax payers. The tax credit would mean that the interest paid would allow the tax payer to take a credit of 15% of the amount paid. What does this mean to you? If you paid $12,000 in interest, you will get a credit of $1,800. If you paid $5,000 in interest, you will have a credit of $750.
These recommendations are just two of many that he Congressional Budget Office has recommended. These are not in bill form and are not a part of the current legislature, these are only recommendations.
The National Association of REALTORS® is “The Voice for Real Estate” and is always looking out for regulations that may impact homeowners in any capacity. Continue to work with REALTORS® because REALTORS® are working for you.
Tags: San Antonio Real Estate, Real Estate San Antonio, Real Estate San Antonio, San Antonio Homes, San Antonio Homes for Sale, San Antonio Tx Real Estate, REALTORS San Antonio, San Antonio REALTORS, San Antonio REALTORS, San Antonio Tx REALTORS, San Antonio Texas Real Estate, San Antonio MLS, MLS Home Search
Comments (4)
Leaders from the right have been pointing this out for years. A tax is a tax regardless of whether or not it is a raised income tax. If you collect more in "revenue" via government confiscation it is a new or increased tax. Substance over form!
Bryan Hancock, about 14 years ago
I find it it amazing that they can talk about not raising taxes, but still throw out ideas like this saying it is a way to raise money without increasing taxes. Anyone that has a mortgage is still going to feel the difference in taxes if they do pass something like this.
Account Closed, about 14 years ago
congress will use every tactic available to cut the deficit without having to rein in their spending. where is Ronald Reagan when we need him.
Don Konipol, about 14 years ago
Congress has been floating this test balloon for a long time now. It will start with "the rich" (by Congress standards) being targeted because they don't carry enough votes to do anything about this nonsense. Why not just cut SPENDING instead of inventing a lot of clever ways to confiscate more "revenue"? Simple...
Bryan Hancock, about 14 years ago