What is the percentage of money refunded by the IRS on the mortgage payments – Money & ServicesReport
I am trying to figure out what is the amount of money I will get back on my mortgage interest. I will pay this year approximately 12K in interest and I am in a low tax bracket.
Can anyway guesstimate how much out that I will get back?
Thank you for your help, I am a new home buyer and trying to figure out my first year’s refund.
Assuming you itemize your deductions – each dollar of interest you pay is effectively subtracted from your income for tax purposes. So if you are in the 15% tax bracket (i.e, you are married filing jointly and your adjusted gross income is less than $67.9K), and you paid $12K in home mortgage ineterest, you will reduce your total tax liability for the year by 15% of $12K, or $1,800.
This is of course just an estimate. For people in higher brackest the math isn’t quite so straight forward, as there are limits on how much they can deduct. But this should be good enough for your planning purposes.
Also, don’t forget that property tax you pay on the propoerty is also deductible.