The married standard deduction is $10,000.
If you itemize your deductions, it's only a "better deal" if your total itemized deduction are MORE than your standard deduction. And then the "savings" is only the different between the standard deduction and the itemized deduction.
Real Estate people will try to sell you on telling you that you will get tax savings on the whole amount of mortgage interest that you pay...but honestly, $10,000 is a generous standard deduction.
I'm a tax preparer - and the fact that a client is paying mortgage interest and real estate taxes on a house does not garuntee that they'd pay less tax with it than without it.
It's more likely that bigger the house, and the higher the real estate taxes. But remember - the actual savings is only the DIFFERENCE between your total itemizations, and the standard deduction. And then actual tax saving is only the percentage of tax you pay onthe difference.
A couple in the 28% tax bracket, for intstance, if their total itemized deductions $11,000...would only "save" $280 in taxes. If they didn't own the house at all, or didn't itemize, they could still take the $10,000 deduction.
· 1 decade ago