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Home Loan Tax Breaks: Do You Get Them?

It is fair to say that you may not be getting the same home loan tax breaks as others out there. Consider this. On the east coast and the west coast, home values are quite high. It seems as if these are the places to be when it comes to tax breaks too. While the middle of the country has lower valued homes, they are actually helping to foot the bill so that those in more expensive housing can get a little break. Mortgage tax breaks are becoming something common, but is it the best for the whole country.

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Here are some facts to think about. On the 2004 income tax forms you filled out, the standard deduction that most homeowners took was $9700. Is that what you took? If you itemized your tax deductions, then you probably took more. If you did this, you were among the very few that did. Most people, especially those that are in the middle of the country (or flyover country) are only able to take the standard deduction because they do not have enough items to get them more.

For example, the mortgage interest deduction is one of the biggest factors in consideration. If itemized your tax deductions you may have done so because you have a large mortgage. The higher your mortgage is, the more that you paid in interest. Therefore, you can take a home loan tax break. That's right. Because your home is more expensive, you get to have a mortgage tax break.

For people on the east coast and on the west coast, it is just common to do this. After all, the home that they own there is likely to be worth more. Yet, in the middle of the country, you may find a larger home, in a more beautiful setting, for much less cost. That means that the home's value is less in the middle of the country, therefore they do not qualify with enough mortgage interest. Deductions don't happen here.

What about those that are paying for it through their standardized deduction? If you didn't qualify for a home loan tax break, someone still has to pay the tax bill. Therefore, although your home is just as big and beautiful but worth less, you end up paying more in taxes than those that have larger homes on the coasts. That does not make much sense, does it?

It gets worse too. The value of the homes on the west coast and the east coast of the country continue to go up. The Office of Federal Housing Enterprise Oversight will tell you that the price indexes for the country as a total averaged at 41.7% appreciated value. On the west cost, the index had appreciated values of 62.6%, and in the New England area, the value of homes went up to nearly 68%. Guess what happens in the middle of the country? The appreciated value of the homes in the middle of the country was just 51.4%. So, the homes are even worth more today than there were just a year ago at a much faster pace. This means even larger home loan tax breaks.

Do you get a mortgage tax break? Will you be able to take a mortgage interest deduction this year on your taxes? You probably can not if you live in the middle of the country. Is it fair? No, it's not fair but that's the system of home loan tax breaks in the country today.

 
     
     
 
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