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Mortgage interest: Who actually takes the deduction?
Jul 26, 2011, 10:23 AM | Updated: Mar 4, 2016, 5:59 am
The debt ceiling debate in Washington, D.C. has included discussion about cutting the mortgage interest deduction (MID). How many taxpayers actually take use the MID?
About a third of all Americans itemize their tax deductions instead of claiming the lump-sum standard deductions. More than 80 percent of those who itemize claim the MID.
More than half of homeowners claim the MID. Surprised that the figure isn’t higher? The MID can only be claimed by homeowners who pay mortgage interest, and nearly one third of home owners own their homes free and clear – without any debt.
Among mortgaged properties, more than 80 percent claim the MID. The remainder who do not claim the MID are likely long-time home owners who have nearly paid off their mortgage and receive a larger tax deduction by claiming the standard deduction than by claiming a deduction for the little mortgage interest that they pay.
Among those who take MID, about two-thirds earn less than $100,000.
