Tax Time, Tax Benefits
Tax season is underway and American home owners are once again enjoying the benefit of the mortgage interest deduction. The ability to deduct the interest paid on a mortgage can mean significant savings for these home owners. For example, a family who bought a home last year with a $200,000, 30-year, fixed-rate mortgage, assuming an interest rate of 4.5 percent, could save nearly $3,500 in federal taxes when they file this year.
A recent survey, American Attitudes About Homeownership, revealed that 74 percent of home owners and 62 percent of renters thought it was “extremely” or “very” important that the MID remain in place. Over half said that owning a home would be less attractive if mortgage interest was no longer tax deductible.
Did You Know…? Home owners already pay 80 to 90 percent of U.S. federal income tax, and this share could rise to 95 percent if the MID is eliminated. Talk to owners and renters in your area about their tax returns and how they compare. Ask home owners if they take advantage of the MID, and what it means for them at tax time.