Only the interest paid on a mortgage is tax deductible. The principle paid is not deductible.
People that pay it down aggressively may not benefit at all from this deduction. Because they will progressively pay less and less interest over the years. There is a pretty high standard deduction already. Without other itemized deductions, many which have been removed since TCJA, it probably won't move the needle on tax bracket or taxes owed.
It might benefit very few like a high income single taxpayer that itemize beyond the standard deduction, and then only for a few years of the life of that mortgage.
Why would it be? You're buying an actual asset that you can later sell. Otherwise you assume it'd be like a 401k. You can put the money in tax free but when you later sell the house and claim a profit you may have additional taxes to pay at that time.
Which is how the current system works, not an agreement with it, there just shouldn't be income taxes.
I never said that it should be. You replied to the grandparent that it is deductible. The grandparent said that a mortgage should be tax deductible. Neither you or the grandparent specified what portion should be or is tax deductible.
All I am saying is the portion of mortgage, that is tax deductible, is not a net tax benefit to most people.
I understand how tax credits and deductions work. A tax deduction only reduces taxable income. If one doesn't have itemized tax deductions exceeding the standard deduction then a relatively small deduction, on its own, has zero net benefit to the taxpayer.
One can take a deduction from their taxable income and it not matter in the total amount of tax owed.
Only the interest paid on a mortgage is tax deductible. The principle paid is not deductible.
People that pay it down aggressively may not benefit at all from this deduction. Because they will progressively pay less and less interest over the years. There is a pretty high standard deduction already. Without other itemized deductions, many which have been removed since TCJA, it probably won't move the needle on tax bracket or taxes owed.
It might benefit very few like a high income single taxpayer that itemize beyond the standard deduction, and then only for a few years of the life of that mortgage.
Why would it be? You're buying an actual asset that you can later sell. Otherwise you assume it'd be like a 401k. You can put the money in tax free but when you later sell the house and claim a profit you may have additional taxes to pay at that time.
Which is how the current system works, not an agreement with it, there just shouldn't be income taxes.
I never said that it should be. You replied to the grandparent that it is deductible. The grandparent said that a mortgage should be tax deductible. Neither you or the grandparent specified what portion should be or is tax deductible.
All I am saying is the portion of mortgage, that is tax deductible, is not a net tax benefit to most people.
huh? You literally don't pay taxes on a portion of your income. There is no "net." It's just a benefit. It's really easy to claim.
I understand how tax credits and deductions work. A tax deduction only reduces taxable income. If one doesn't have itemized tax deductions exceeding the standard deduction then a relatively small deduction, on its own, has zero net benefit to the taxpayer.
One can take a deduction from their taxable income and it not matter in the total amount of tax owed.