How Mortgage Interest Deductions Can Help You Save on Taxes
Filing taxes is never what most rational folks would call “fun,” but if you own a home, the onerous process may at least lead to a nice bit of delayed gratification down the road. Because if you have a mortgage, you could be looking forward to a federal tax break in the form of a mortgage interest deduction. So what exactly is a this deduction?
In a nutshell, the mortgage interest deduction allows you to subtract whatever you’re paying toward mortgage interest from your taxable income. And the lower your taxable income, the less you pay in taxes! Sweet!
The mortgage interest deduction has been in place since the original tax code, and while many politicians and officials over the years have broached the idea of eliminating it, it remains in place—at least for now—most likely because it serves as a solid incentive for people to buy rather than rent, says Shayna Chapman, a certified public accountant at Shaynaco LLC in Gallipolis, OH. After all, putting down roots is good for communities and our nation at large, so it makes sense that Uncle Sam would want to reward homeowners with a tax break. – from Realtor.com
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