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Will the Mortgage Interest Deduction for Higher-Income Households Be Whittled Away?

3/2/2009

Apparently, yes. Today is Monday, the second of March. On Wednesday, President Obama’s plan for rescuing homeowners and the housing market is expected to be released in detail. But at this point, a reduction in the amount of mortgage income that can be deducted on the taxes of households making $250,000 or more annually is definitely in the plan.

Already, interest is only deductible on up to $1 million of debt used to acquire, construct, or substantially improve the residence, or up to $100,000 of home equity debt regardless of the purpose or use of the loan.

Sure, $250,000 in household income sounds like a fortune if you’re living in, say, a Midwestern town where median household income is $30K to $40K. But in high-cost-of-living areas such as California and the Northeastern U.S., that amount is usually considered merely “comfortable,” and in super-high-cost-of-living cities such as San Francisco and Manhattan, $250K is simply…the middle class.

Click here to read more about the plan as it now stands.


Print Date: 9/21/2020
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