I moved to a nice farm in Kentucky with a new house. If my entire house payment was interest (it’s not anywhere close to it) I would still take the standard deduction. The deduction for interest on home loans is only a selling point in blue counties where home prices went through the roof. And now that house prices are STILL tumbling in those areas and interest rates are flopping around on the floor, more and more people find themselves in the same position.
IOW, the interest deduction is looking more and more like a handout to the rich an upper middle class. I say that because compared to most people around me, I’m “rich”, yet my house payment, with interest, would have to triple or even quadruple to allow me to get more of a deduction than the standard deduction.
I haven't had a mortgage in several years but due to out of pocket medical expenses - $16,000 in 2010, $14,000 in 2011, plus my church giving makes it better for me to itemize.
That’s you
This is me
Losing the mortgage interest deduction will raise our taxes by almost $6000 a year, and where is that supposed to come out of? What we are desperately trying to save for retirement?
I’m sure we are fairly typical of many who are squarely in the middle class