I’m either completely wrong or completely stunned. Here’s an article on the Wall Street Journal site that says: “Californians that claimed the mortgage interest rate deduction saved an average of almost $20,000 from their tax bill in 2008”
Then when you look at the chart it revels that the average DEDUCTION is $18,876 for California.
Now unless I’m mistaken, and been messin’ up on my taxes for years, a deduction is not the same thing as saving that amount off your tax bill. Doesn’t a writer for the Wall Street Journal know this???
Am I completely wrong??????????
Seems to me that a tax deduction for interest of $18,876 is worth at best 5 or 6k off your tax bill, and given you lose the standard deduction when itemizing (which you gotta do to take the interest) this author is waaaayyyyy off base with his claim.
XBoxBoy,
ps. for someone to save 20k off their tax bill wouldn’t that have to pay over 50k a year in interest? Does anyone think the average californian who’s paying a mortgage is paying over 50k a year in motgage interest?[/quote]
When I first read that, i’m thinking, wow, that can’t possibly be right. And it’s not. Crappy reporting. (Let’s give credit where it’s due. That crappy reporting was done by Conor Dougherty of the WSG Blog.) The average deduction is almost $20,000. Maximum tax savings would be about $7,600. About $635 a month for an average mortgage deduction in the highest tax bracket. ymmv.
