- quote -

You would claim the interest and the property tax on
schedule A. In some states the bank pays the property tax on
your behalf and this number will be on the 1098 form. Other
states you've paid yourself and have to find that number
yourself.

Itemizing only saves taxes if it exceeds the standard
deduction of $9,500 for a couple filing. Note there are
many other things you can itemize- the big things being
state taxes and chariable contributions. You may not execeed
the $9,500 threshhold until you owned the house for the
whole year.

Then the amount you actually save is your highest income tax
rate. For many people that is 25% or 28%. So you
approximately get back about a quarter of your interest. If
you work for an employer, they use tax tables that already
include the $9,500 standard deduction. So you'd only get
25% of the amount higher than this.

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$3,000 times your tax rate, but add on your state tax rate,
too. And add on the property (real estate) tax times tax
rates. And - generally owning a home means you get to deduct
all those little things you skipped before because they
didn't add up to more than the standard - like a few bucks
to the church and a few for the Salvation Army bags.....

Nan, EA in LA

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come_try[at]yahoo.com (CT) wrote:

- quote -

That is clear.

- quote -

First, you did not get a W-2 form, you received a 1098 form.
Second, You did not pay $3,000 in TAXES, you paid the lender
INTEREST on your loan.

- quote -

Unless all your itemized deductions (including the taxes and
interest paid) EXCEED the standard deduction for your filing
status ($9500 for MFJ in 2003) you will see NO tax benefit.
Even if the itemized deductions do exceed the standard
deduction, you only get a tax benefit for the amount that
exceeds the standard deduction. The benefit is equal to that
amount times your marginal tax rate.

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"CT" <come_try[at]yahoo.com> wrote:

- quote -

You are confusing several things in your question. You said
you "got a W-2 from the mortgage company that said you had
paid $3,000 in taxes which is the interest on the mortgage".
You need to look at that statement from the mortgage
company. First of all, it is not a W-2 (that is what you
get from an employer). Secondly, the $3,000 is either real
estate taxes or mortgage interest-not both. The fact is,
you may or may not be able to itemize your deductions on
your return. You need to get someone near you who prepares
taxes to help you with this. You will only get the tax
benefit of whatever amount of itemized deductions that you
have times whatever tax bracket you may fall into. You will
not a tax benefit for 100% of this $3,000 whether it is
taxes or interest.

Wayne Brasch, CPA, M. S. Taxation

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come_try[at]yahoo.com (CT) wrote:

- quote -

You don't get W-2 from mortgage companies, you get them from
your employer. You should have gotten a 1098 from the
mortgate company.

- quote -

Huh? Taxes and mortgage interest are completely different
things. However, they're both deductible.

- quote -

If you itemize, they will reduce your taxable income. This
will reduce your tax by the $3,000 times your tax rate.

The only time you get the entire amount of something back is
when it's a tax credit rather than a deduction.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA

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hi,

dont know much about taxes so I thought I would as this here.

this is the first year that we have owned a house and we
just got our w2 from the mortgage company. it said that we
had paid around 3000 in taxes which is the intereston the
mortgage.

on filing taxes will i get the entire 3000 back or will it
be 3000 times my taxrate?

thanks.

ct

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