Quote:
Originally Posted by retiredguy123
As I understand it, you can only benefit from the mortgage deduction for the amount that exceeds the standard deduction. So, if the standard deduction is $15K and your mortgage interest is $15K, your tax savings is zero, unless you have other deductible costs in excess of the standard deduction. Also, note that people over 65 get an additional $3,900 exemption that adds to the standard deduction.
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Not exactly. If mortgage interest paid = deduction....
You have no net money gain or loss.
You have lost the standard deduction, meaning you will pay more tax.
If income is $100k, standard deduction is $15k, potential mortgage interest of $15k, and CD interest 15K...
If mortgage int, and interest earned, taxes are income + interest earned - Mort int = 100 +15 -15 = $100k taxed. You pay 22% of 15k more taxable income in taxes.
No mortgage or interest, taxes based upon income - std ded = $85k taxed.