do you lose your mortage writeoff if you make too much money?
- 1 decade agoFavorite Answer
Yes. And if this is a possibility for you, I would keep an eye on what Congress is (and isn't) doing right now. You might not want to file until later in the season. They are attempting to 'fix' the Alternative Minimum Tax (AMT), and it is possible that your own limitation could be eliminated. If you file early, you'll have to amend your return to get back anything you're owed. If you just wait, it is likely you'll have an easier time of it. Also, call your Congressmen and tell them you support the elimination/reduction of the AMT!!!
- ninasgrammaLv 71 decade ago
There is no phaseout specifically for the mortgage interest and real estate taxes due to increased income.
If your adjusted gross income is over $156,400 (half that if MFS) then your total itemized deductions start to decrease. They can decrease by 20%. So, if you make well over the threshold, your mortgage deductions can decrease by up to 20%.
If you are subject to the AMT, then you do not lose your mortgage interest deduction. In fact, you get to deduct excess mortgage interest deductions. However, you do lose your real estate tax deduction. Of course, the AMT is going to be higher than your regular tax, so if you are subject to the AMT, then you pay more taxes, in part because you could not deduct your real estate taxes.
- Bostonian In MOLv 71 decade ago
Yes and there are 2 possible ways you can lose it. Deductions start to phase out as your income rises. Additionally you may be subject to the AMT and that can limit your deductions or trigger higher tax rates that effectively reduce or eiliminate the value of the deductions.
- Anonymous1 decade ago
Actually AMT does look at mortgages. Original loans, not a problem. Refinance loans spent on the same house, not a problem. Refinance loans used to pay for tuition, credit card bills, etc, problem. That interest *is* added back to income for AMT purposes.