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A Mortgage Interest Deduction Roundup

This week, Michelle Edwards guest posted at CafeTax, Snow Day! Am I required to pay my employees for a snow day? Given the record snowfall many of us have seen this season, this is a great question for discussion. Michelle walks you through the rules, complex they may be.

My favorite Tax Blogger, Kay Bell posted A chink in the mortgage interest deduction armor? It seems this tax deduction isn’t so sacred, more talk of it getting reduced or going away altogether. For me, truth is that my mortgage interest is one fourth what it was when we bought the house. Principal paid to less than a third remaining and the interest rate dropped by a third through refinancing. I’m in favor of eliminating the second home deduction for interest, and even capping the deduction to interest on the first, say $500,000 worth of mortgage debt. We’ll see how this goes.

While we’re talking taxes, TaxGirl broke the news that IRS Okays Breastfeeding Supplies as Medical Expenses (but won’t agree that breast is best). The IRS made the right decision here, given the medical benefits of mother’s milk to the newborn, I think the tax deduction is minimal compared to the benefit to society of avoided health care expenses down the road.

The Oblivious Investor shared his own roundup along with some personal finance calculators. I still love my trusty Texas Instruments BA-35, but the online calculators are still cool.

And to wrap up this week, at One Mint, Do you know these 8 Investment Myths? Posts like this remind me that I can still learn from other’s mistakes and misconceptions. See if you don’t pick up a few tips here as well.

Have a great week ahead.
Joe

  • Kent Holden February 15, 2011, 3:31 pm

    Hi,

    I realize there is a lot of discussion surrounding the mortgage deduction. You make the point that with interest rates so low, it is not a big impact on tax returns. Let’s not forget that what goes down will surely go up…Interest rates will remain low to stimulate the economy but will continue to rise over time…if the mortgage interest is removed as a deduction, it will never come back…think about it….plus I agree with you about the 2nd home deduction….

    Kent Holden
    America’s Corporate Headquarters
    Website: http://www.squidoo.com/americas-corporate-headquarters
    Email: Kent@AmericasCorp.com

  • JOE February 15, 2011, 4:15 pm

    Kent, I think there will an impact and it won’t be good. I’d survive, as my mortgage intest happens to be 1/4 what it was when we bought, but others won’t be so lucky. Tough situation.

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