Assume:
$9,877 = Mortgage interest paid (a loan of $150,000
for 30 years, at 7 percent, using year-five interest)
$2,700 = Property taxes (at 1.5 percent on $180,000
assessed value
______
$12,577 =
Total deduction
$3,521.56 = Amount you have lowered your federal
income tax (at 28 percent tax rate)
(12,577 X .28 = $3,521.56)
Note that mortgage interest may not be deductible
on loans over $1.1 million. In addition, deductions are decreased when total
income reaches a certain level.