If interest rates to compensate for the collapse of subprime only exacerbate the problem?

Deal Score0

Meaning, when people signed up for variable rate mortgages, because prices were low initially, and many have since, in this non-performing loans would reduce the prices of a slowing economy that people want to return the balance of weapons?
I paid about $ 7,500.00 in interest on my mortgage. last year. Now, besides my mortgage interest, I have the govt around $ 4400.00 and I was wondering if I include my mortgage interest rate to compensate for this, I owe them. And I have about 70,000 last year and only paid about 4000.00 in federal taxes

7 Comments
  1. Reply
    wickettrice1123
    February 15, 2011 at 7:31 pm

    Lowering rates will entice people to seek ARM’s. The lending institutions are scared to death b/c of the economic outlook, so I would have to assume that they will tighten up their lending practices. This will help prevent some of ramped lending to subprime borrowers.

  2. Reply
    ed m
    February 15, 2011 at 8:25 pm

    no — because the house that have been defaulted will be scooped up by folks with excellent credit and prepared and willing to deal with the arm coming at them — kind of like weeding the garden!!!

  3. Reply
    NunyaBidNess_Part_Deux
    February 15, 2011 at 8:47 pm

    Lowering the rates would create a new flood of RE-FI’s like we saw a few years ago…

    People who got burned on the sub-prime loans, would FLOCK to set their loans at a lower new FIXED rate. Best thing for the housing industry right now IS for the rates to go down….

  4. Reply
    Steve D
    February 15, 2011 at 9:09 pm

    All of your interest plus your property taxes are deductible. The $ 4000 paid in seems low for that income level, so I suggest going through the IRS publications looking for as many deductions as you can. Given that the mortgage interest is above the standard deduction and if you add in property taxes, you should be able to shave that amount owed down some.

  5. Reply
    Othniel
    February 15, 2011 at 9:58 pm

    You may be able to itemize your deductions and offset your taxable income by the amount of the interest, real estate taxes, State income or sales taxes, charitable donations etc. All of the interest is deductible on your home loan if you itemize.

    A lot also depends on how you file (i.e. MFJ, HH, or single)and if you have children as to what you will have to pay in taxes.

  6. Reply
    hrblock.laura
    February 15, 2011 at 10:55 pm

    You are allowed to deduct from your income either your standard deduction for your filing status or your itemized deductions, usually whichever is higher. Your mortgage interest will be added to all your other itemized deductions to determine if the itemized deductions are higher.

    Other items on Sch. A, itemized deductions, are real estate taxes, medical expenses that exceed 7-1/2% of your adjusted gross income, state and local income taxes or state and local sales taxes, personal property taxes, charitable contributions, certain work related expenses and many other items.

    I am attaching a link to Sch. A instructions.

    So in your case if your itemized deductions exceed your standard deduction for your filing status, you will see a decrease in the tax you owe. How much it decreases it will depend on your total itemized deductions.

    Laura H – H&R Block – Senior Tax Advisor 5
    **This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided.

  7. Reply
    hrblockerrolquinn
    February 15, 2011 at 11:49 pm

    Dear J: The first place to look is your W4 at work. It is probably set up with too many allowances. You may deduct all mortgage interest on the first million dollars of acquisition debt(MFJ) and home equity interest on up to $ 100,000(MFJ). Sounds like all of your interest is deductible. Try the free H&R Block calculator to estimate your tax liability with and without the interest deduction. This interest goes on Sch A as well as property taxes and other deductions. Look at the Sch A instructions on the IRS web site for additional items to claim.

    This advice was prepared base on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided. Click on my profile to read more. Errol Quinn Enrolled Agent Master Tax Advisor

    Leave a reply

    Register New Account
    Reset Password