First a disclaimer. I can not give tax advice and this isn’t tax advice. Please, consult a tax professional for advice, not your Realtor, hairdresser, trainer, or the neighborhood group on your favorite social network.
Recently an older couple who are considering moving told me that they might want a mortgage on their new place because it is a tax deduction. Of course, the mortgage isn’t deductible but the interest on it is.
Just because something is tax deductible does not mean that you will get a tax deduction. Most people get a larger deduction by taking the standard deduction rather than itemizing.
Do you itemize? Can you itemize? should you itemize? If you answered yes to all three then maybe a nice big mortgage is for you.
The interest paid on a home mortgage is only a tax deduction for those who itemize. There is also now a limit on how much mortgage interest can be deducted.
In 2023 a married couple filing jointly may take a standard deduction of $27,700. For more than 80% of taxpayers, the standard deduction is greater than itemized deductions, which is why they do not itemize.
Before choosing to pay interest on a mortgage because it is a tax deduction consult your tax preparer or an expert. For people who really like to make interest payments to banks, I guess. mortgage is always a good thing.
The wealthy benefit the most from the mortgage interest deduction. In fact, it is one of the larger government subsidies for the wealthy, that costs U.S. taxpayers 70 billion a year.
HUD Makes $113 Million Available in Affordable Housing Vouchers in 2023.
Also, some Minnesota property taxpayers and renters get money refunded back by the State of Minnesota. but only if they apply for it within the next two years.
There is also a property tax deferral program through the State of Minnesota for persons who are over 65. Sometimes there is confusion over these programs because property taxes are paid to the county but refunds come from the state.
Taxes are never simple which is why I get extra cranky around tax time.
