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How does mortage interest tax deduction work?

487 160 May 30, 2016 at 05:08 PM
If I ha $500,000 mortage, paid $15,000 interest during the year.

Would my tax deduction be a percentage of $15,000 off in tax payments?

Or would tax deduction be Gross income - $15000?

thx
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webazoid
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genghiskhan
05-30-2016 at 05:48 PM.
05-30-2016 at 05:48 PM.
Quote from webazoid :
If I ha $500,000 mortage, paid $15,000 interest during the year.

Would my tax deduction be a percentage of $15,000 off in tax payments?

Or would tax deduction be Gross income - $15000?

thx

It would be a deduction from your income.

Guessing you do mean federal income tax here are the rules
https://www.irs.gov/publications/p936/ar02.html
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Last edited by genghiskhan May 30, 2016 at 05:51 PM.
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SnakePlisken
05-31-2016 at 12:06 PM.
05-31-2016 at 12:06 PM.
Are you filing jointly? If that's the case, your standard deduction is $12,600, so a $15,000 interest deduction saves you a minimum of $2,400 * your tax rate. So if your tax bracket is 33%, it saves you $792 over what you get from the standard deduction.
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cr8ter
05-31-2016 at 03:54 PM.
05-31-2016 at 03:54 PM.
the mortgage tax deduction works pretty well, actually.
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