hookemhorns wrote: ↑
Sun Jun 10, 2018 12:29 pm
Our mortgage is 30yr fixed at 3.75%, which after tax is ~2.5%. The after tax cost could be even lower if income tax rates go up, which is possible long term.
My computation shows that the MAJORITY of homeowners can not EFFECTIVELY take advantage of the mortgage interest deduction on Federal Taxes after the 2017 tax law was introduced.
Do you mind sharing if you know for sure that you are taking 100% advantage of the mortgage interest deduction?
In our situation, for 2018:
- standard deduction for MFJ is $24K,
- SALT is limited to $10K (we have a lot of SALT, as R/E taxes alone are $10K, and state income taxes $80K),
- so that leaves a $14K hurdle to overcome,
- our mortgage interest is only around $14-15K.
So unless we make huge charitable deductions (which we don't), we can't take adv of the mortgage interest deduction.
So I am playing the following game:
- 11 mortgage payments in even years, 13 mortgage payments in odd years,
- all charitable deductions go in even years, doubled up.
Thus, in even years, we get to deduct, at the margin:
- about 2 months of mortgage interest payments,
- 2 years worth of charitable deductions.
In odd years, we just take the standard.