Originally Posted by bjrn
Using the following 2 scenarios - is there any tax advantage to either scenario.
1) Deduct mortgage interest $3000 and property taxes $3000
2) Deduct $6000 donated to charity (no mortgage interest or property tax deductions)
We are in the 25% tax bracket. We are married filing jointly.
We are selling our house and don't plan to buy another for several years so we'll rent. When we buy our next house we hope to pay cash. Home values have fallen in our area and don't see that as a good investment.
same effect;neither of them is subject to agi limit.however, you can reduce your tax liability by 25%.As you can see, UNLESS you itemize deductions on Sch A of 1040, no worse off/better off at all.
While itemizing your deductions can save you a great deal of money and significantly lower your tax bill, using Sch A and listing your deductions is not always the best choice. The IRS provides a standard deduction thatyou can use, and in some cases that standard deduction can be more than the total on Sch A. If you have any of the deductions allowed on Sch A, it is a good idea to go through the process of completing this schedule. After you have listed all your deductions simply calculate your total and compare it to that year's standard deduction. If the total on Sch A is higher than your std ded. itemizing will save you money. If not, put Sch A back in your desk drawer and go with the standard deduction instead.