April 18, 2013
The tax deduction for home ownership is overstated, especially for low to moderate income people who buy relatively modest homes? Why?
The tax deduction for home ownership is overstated, especially for low to moderate income people who buy relatively modest homes? Why?
Because the tax deduction is based on itemized deductions (property taxes and the interest that you pay on your home), the standard deduction, the difference between the itemized and standard deductions, and the marginal tax rate. I’ll use the example Finley used Monday night. If you have $15,000 of itemized deductions, you have to subtract $12,200 (the standard deduction for a joint account). The actual benefit is the difference ($2,800). Next, you have to subtract the marginal tax rate (it varies by state/person, but Finley used 30% as a general rule of thumb). After you subtract all of these from the original $15,000, you get a whopping $840 of actual savings. The people who get the biggest deal from this tax deduction are high income people. They buy big homes and instead of a $15,000 itemized deduction, they might have a $115,000 itemized deduction.
Another fine answer, Katherine. Here is the key point: Buy a home because you love it, you have 20% to put down on it, and you can easily afford the monthly payment (under 30% of your gross monthly income) on a 15 or 30 year fixed rate loan. DO NOT buy a home because it provides you a tax reduction. If that is one of your key reasons to buy, keep renting!
0% apr credit cards
Ppl like you get all the branis. I just get to say thanks for he answer.
You are telling me I caonnt just continue to use a single folder with all of my papers and a rubber band around it? Haha. I am only kidding, Rachel. Thanks for the tips! http://stivxmq.com [url=http://yjifignx.com]yjifignx[/url] [link=http://kzywel.com]kzywel[/link]
car insurance rules
I agree, secretly I don’t feel cfmrootable using many of the online sites either. Sounds like you are a lot like me, fellow number cruncher Many moons ago, I tried Microsoft Money and quicken, but I always found that I could get exactly what I wanted in my simple little ole spreadsheet more quickly Thanks for stopping by!!! http://utjexxuyy.com [url=http://vrnairefh.com]vrnairefh[/url] [link=http://xdrsluqartu.com]xdrsluqartu[/link]
car insurance quotes
car insurance quotes