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July 29th, 2008

Bill Benefits Those Without Mortgage Payments

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If you’re thinking the new housing bill won’t benefit you because your mortgage is paid off, think again. A component of the bill offers a tax deduction for those who pay state and local property taxes, but do not itemize their federal taxes.

Borrowers who don’t itemize most likely include elderly homeowners with no mortgages or borrowers with small loans. In order to take advantage of the mortgage interest deduction, a taxpayer must itemize, and their tax credit needs to exceed the standard deduction ($5,450 for single filers, $10,900 for joint filers) presently.

This tax break provides up to $500 for single filers and up to $1,000 for joint filers. The tax credit is especially applicable to seniors, or those with minimal or zero mortgage payments. The tax deduction will apply to 2008 tax filings due April 15, 2009. We’ll have to wait and see if the tax credit is extended past 2009.

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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