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Financial Planning / Tax Strategies
|Subject: Re: Question Re: Mortgage Interest Deduction||Date: 2/9/2001 2:15 PM|
|Author: irasmilo||Number: 46052 of 125005|
Not necessarily. First problem -- you're not married.
Who's name is on the mortgage. If only one of you, then only that person can consider taking the deduction.
If both of your names are on the mortgage, then the person who paid the interest gets the dedcution. You don't both get $18,000 in interest deductions.
If paid out of a joint account, then you can divide the deduction any way you want as long as neither of you deducts more than s/he contributed to the joint account.
Now to the calculation:
Probably a little less than $5040 (combined). If you are currently itemizing deductions, you will have to reduce the $5040 by the amount of tax benefit you were receiving for the old mortgage.
If you were using the standard deduction, the calculation is a bit more complicated. Add up all your itemized deductions (with the $18,000 interest deduction). Subtract the value of your standard deductions. Take this result and multiply by .28 (assuming 28% bracket).
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