papogator24
New Member
- Feb 20, 2007
- 639
- Boat Info
- 2007 240DA - Stolen
5.0L Bravo III
3Kw Westerbeke
- Engines
- 5.0L Bravo III
With a 20 year note, the first several years payments are primarily interest. For simplification, $1,000 payment = ~$800 interest. You reduce your gross income by $800 per month since the interest is fully deductable (assuming you itemize deductions). If you are in a 30% tax bracket, that results in 30% of the interest payment $800 toward your return (or offsetting what you owe), or $240 per month, or ~25% of your monthly payment.
Shooting for a higher interest rate to have a larger tax write off doesn't work because your offset is only 30% of the interest payment.
I have a 20 yr loan with BOA for 8.25 from last year. Are you saying that I can deduct the interest for my tax returns?