Expert: Dick Dennis - 6/27/2006

Question
I've been told there is a tax write off when owning a home with a mortgage. If I paid $10,000 in interest for one year is this amount subtracted from my gross income for that year? For example if I made $100,000,  would I only be taxed on $90,000? I'm not sure how this works. Any information would be appreciated...

Answer
If you pay $10,000 in yearly interest on your mortgage, Eric, you tax bracket will determine how much actual tax dollars you may deduct. Let's say you are a 25% bracket. You then would actually be deducting $2,500 in tax you would ordinarily have paid if you hadn't paid that $10,000.

So you can see those people who have a higher tax bracket would be deducting more. But they would be paying more tax elsewhere if they don't have other tax deductions.

As always, I recommend you talk with your tax expert.

I do wish you well.

Dick Dennis       dixiedee13@aol.com
www.oldproblemsolver.com