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How much is this property worth?

How much is house and property tax deduction really worth?

  • I'm just curious as to how much we actually "get back" for owning our house and paying taxes. Our income last year was approximately 75K, and our taxes and the interest part of our mortgage (not the principal) came out to be about $15K. We itemized our return and whatnot (itemizations totalled about $20K including the mortgage and taxes). So would anyone know, how much real money did we actually get on top of what would have gotten if we didn't itemize? Is it really that different?

  • Answer:

    It is very different. Since you say "we" several time I assume you are married filing jointly. The standard deduction for you would otherwise have been $10K. Since you got $20K, you doubled your deduction. This does not mean you saved $10K, though. Start with your tax rate (total taxes you should have paid divided by your income after all deductions). Multiply this by the difference between the $20K that you itemized and the $10K standard deduction. This is the savings for itemizing. Based on your income, you probably pay around 20% in taxes, so itemizing should have saved you around $2,000. Well worth it.

monster5... at Yahoo! Answers Visit the source

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For federal income taxes, it is worth exactly the amount of your tax rate. For example: if you pay $10,000 in interest during 2005 for your mortgage, and based on your income, you are in the 25% tax bracket, then you just multiply your tax amount times your interest payments. .25 x 10000 = $2,500 That's what it's worth. I hope this is the best answer.

JoshInShermanOaks

The standard deduction is different depending on if you are married or single. If you have enough deductions to itemize it is usually more beneficial to not take the standard deduction and figure out the amount if you itemize. Talk to your tax preparer, they will be able to provide more information. The amounts also vary by state as well.

melkins542

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