How much money do you get back in taxes for a mortgage?

One of the most popular tax deductions in the United States is the mortgage interest deduction (HMID). It is being promoted among real estate agents, homeowners, would-be homeowners, and even accountants. Unfortunately, fiction is often more compelling than reality.

What to focus on when doing your tax deductions

  • Homeowners who file their taxes are eligible to deduct the interest they pay on a mortgage loan up to $750,000.
  • The 2017 Tax Cuts and Jobs Act (TCJA) lowered the limit on the basis of home loans that can deduct interest from $1 million to $750,000.
  • Also, the TCJA essentially quadrupled the basic deduction, so fewer people need to itemize in 2018.
  • As a result, many homeowners are left without compensation.

What will change in 2017 for your tax deduction

As of 2017, everything changed because of the Tax Cuts and Jobs Act (TCJA). For new mortgages, the law limited the debt for which interest can be deducted to $750,000, down from $1 million.. Also, when Congress eliminated the personal exemption, the standard deduction nearly quadrupled, making it unnecessary for many taxpayers to itemize. At first, they can claim the personal exemption in addition to any itemized deductions they claim.

For the first year after the TCJA began, approximately 135.2 million taxpayers were expected to use the standard deduction. In contrast, it was predicted tha20.4% of taxpayers will itemize, and 16.46% of those who file will deduct mortgage interest..

Assume that the total of all your itemized deductions is less than the amount you qualify as a standard deduction. In that case, it may be wise to forgo the mortgage interest deduction and take the standard deduction instead. The following percentages are used in the standard deduction:

  • For tax year 2022, the standard deduction for single and married filing separately is $12,950.
  • For tax year 2022, the standard deduction for married couples filing jointly is $25,900; for eligible widow(er), the standard deduction is $15,900.
  • Heads of households twenty-two years old will earn $19,400 in 2022.

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