Mortgage Interest Deduction Going Away?
The Jobs Act and Tax Cuts bill modifying the mortgage interest deduction was signed into law on December 22nd, 2017.
I thought this 2010 article about the same topic would be interesting to see how it unfolds. A “hot topic” in previous administration proposals put the mortgage interest deduction on the chopping block also.
The mortgage interest deduction gives you the ability to itemize the mortgage interest you paid during the year. This will reduce your net taxable income by this amount.
The elimination of the mortgage interest deduction for second homes and primary residences over $500,000 was proposed on November 10th, 2010 as part of the President’s bi-partison deficit reduction commission.
Who Deducts Mortgage Interest?
The reality about the mortgage interest deduction is that most tax payers opt to take the standard deduction as opposed to itemizing their deduction as is necessary to claim the interest tax credit.
The national average of tax payers that itemize deductions is 29.24% which is slightly above the national average of 26.83%.
Political and personal views aside, I do not see this as a seriously concerning issue for most home buyers in California or any other state for that matter.
As I see this story more and more in the news I felt it appropriate to keep an eye on it and translate it as best I can to offer another opinion in order for you to make more informed decisions about how this would or would not affect you.
If you are currently writing off mortgage interest for a second home or equity line of credit on your primary residence, this may have some impact on your net income calculation and possibly affect your tax liability.
We’ll keep an eye on it and report what we hear, when we hear it.
This never came to fruition. But it’s interesting to see what the conversation was in 2010, right?