How would your financial picture change if they ax

[Deleted]

both the mortgage interest deduction and state/local taxes from being itemized?

I'd probably only owe another $750 bucks or so.

[hamster]

Last year it changed us from owing about $1800 to getting back $1800 if I recall. So, a lot.

[Deleted]

Not at all. I rent, and I don't itemize anyway.

[Susie]

My financial picture would change a lot. We would no longer qualify to contribute to Roth IRAs. We'd owe thousands more in federal income tax.

If the rate was lowered at the same time deductions were eliminated we might break even-ish, but the Roth IRA thing would still be an issue.

[Deleted]

We don't own a home so mortgage deduction would not impact us.

State/local taxes not being able to be deducted would be huge for us -- about 10% of our non-adjusted gross income goes to state and local taxes so that's a very big deduction for us. And it would keep us from being able to itemize our charitable deductions.

[Deleted]

a lot.

[chessie]

a lot, we would owe a LOT more. House and student loans are the only deductions we really have at this point..

[calico]

We would owe thousands more.

[barefootcontessa]

It will totally mess up my long-range financial plans. We are looking at having to carry two mortgages next year (hopefully not for long) and it will be a major setback if they eliminate it.

All this uncertainty is terrible on so many levels.

[audette]

Zero change in our finances.

We're TX residents, so no state income tax, and we do not own a home, so no mortgage interest deduction.

[pitterwoo]

no change

[cookies]

We'd definitely feel the bite. I'd go from feeling comfortable, to feeling that finances are tight.

That said, we have to sell our place next year and we'll be renting when we move, so I guess we'll be "taking home" less money next year regardless of what happens.

I'm so over this fiscal cliff BS.

[Deleted]

No change. We don't itemize.

ETA. Oh apparently we do itemize now and I didn't know. So the new answer is -$14,000. Boo.

[ssmjlm]

A lot, we deduct a lot of mortage interest.

Although after refinancing, we've paid quite a bit less in interest this year, so it will be interesting to see how taxes come out.

[LoveTrains]

I am going to be so pissed if the charitable deduction gets cut. That is all.

[Velvetshady]

It would make doing our taxes much easier--we'd no longer have a reason to itemize. And we'd go from paying a higher % than Romney to paying a *much* higher % than Romney.


eta: That said, our financial picture would still be much better than if we go flying over the fiscal cliff. The downside of both having jobs relying on the Fed Government.

[Deleted]

Dec 6, 2012 15:11:31 GMT -5 LoveTrains said:

I am going to be so pissed if the charitable deduction gets cut. That is all.

This would be the stupidest cut ever.

[gtkim]

A crapton. We both earn nice salaries and we have no kids. So mortgage interest deduction is huge for us as it is about $24K alone. Not to mention everything else.

We are already prepared for our income to go down $1K+ with these tax hikes which will really cut into our savings and force us to reduce our spending quite a bit as well.

[Deleted]

Dec 6, 2012 14:55:29 GMT -5 chessie said:

a lot, we would owe a LOT more. House and student loans are the only deductions we really have at this point..

this is us. We have a baby but we have a FSA for daycare so we dont save on our taxes for that cost.

[chessie]

Dec 6, 2012 15:16:34 GMT -5 vigurl said:

Dec 6, 2012 14:55:29 GMT -5 chessie said:

a lot, we would owe a LOT more. House and student loans are the only deductions we really have at this point..

this is us. We have a baby but we have a FSA for daycare so we dont save on our taxes for that cost.

I was told a kid wouldnt even help us, keep hearing there is a max for some of the child deductions.

[SJ]

Both of these proposed cuts irritate me so much I don't want to do any calculations.

[ddi741]

We would end up with atleast $1000 change in our return. If they took away the charitable deduction that would impact us also. We have no kids so the only deductions we get are mortgage interest and charitable.

[AAM2012]

A lot. So much so I don't want to even think about it.

[knitty]

Don't forget that it you can't deduct local taxes you might drop below the threshold of itemising, and not have to pay much more at all.

[savannah11]

Um, we bought a house and got an extra 15k back in federal and state refunds the first year we claimed the deduction. That is huge. Huge.

I wonder if removing the state tax deduction would mean we are no longer subject to the AMT? That could help offset some of that.

[njohnson1972]

Just based on the question, we would owe $3,600 more. Since we don't pay state taxes, we do get a sales tax deduction and I don't know if that would go away. And what about property taxes?

[Deleted]

I wouldn't be able to itemize without either one. My charitable deductions are the only other thing I can itemize and they aren't enough.

[Susie]

Dec 6, 2012 15:11:31 GMT -5 LoveTrains said:

I am going to be so pissed if the charitable deduction gets cut. That is all.

If they cut mortgage interest + state tax deductions, I'm afraid it would effectively get cut even if it isn't expressly cut. If people who previously itemized, don't anymore because of the cuts to other deductions, charitable donations wouldn't be incentivized among a large swath of the population who can't afford to exceed the standard deduction in charitable donations alone

[MrsManners]

Dec 6, 2012 15:18:33 GMT -5 chessie said:

Dec 6, 2012 15:16:34 GMT -5 vigurl said:

this is us. We have a baby but we have a FSA for daycare so we dont save on our taxes for that cost.

I was told a kid wouldnt even help us, keep hearing there is a max for some of the child deductions.

There's a max income limit on the child deduction. We don't get to take it. If the other two deductions went away, they would massively impact us.

[ondaflipside]

Dec 6, 2012 14:49:20 GMT -5 flygirl said:

both the mortgage interest deduction and state/local taxes from being itemized?

I'd probably only owe another $750 bucks or so.

It will cost us a few thousand bucks.