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Standard deduction
Old 06-25-2007, 03:07 PM   #41
Thinks s/he gets paid by the post
Join Date: Aug 2006
Posts: 1,427
Standard deduction

I think it depends on what your state taxes are like (and your income). I live in Minnesota, and my state income taxes and property taxes combined (both are deductible) are more than the standard deduction, so my morgage interest deduction is a real benefit over the standard deduction.

This would probably not be the case if I lived in Mississippi.

Originally Posted by Nords View Post
Once the standard deduction is figured in, I don't think there's much of a tax advantage to having a mortgage.

Reducing the mortgage interest rate by one's marginal tax bracket is not what's actually being "saved", and the concept behind the math is as screwed up as that "80% of pre-retirement income" thumbrule that journalists are always blathering about.

But that interest deduction has sure guided a lot of home-buying behavior, as well as all those heart-warming FHA commercials... so as a government subsidy I suspect that it actually delivers a whole lot of bang for the forsaken tax revenue.

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