Tuesday, February 20, 2018
Business

The Nation's Housing: Cost of mortgage tax deduction falls

A surprise on cost of mortgage write-off

WASHINGTON — In the contentious debate over whether to reduce or eliminate the home-mortgage interest tax deduction — or leave it alone — one fact has been virtually unchallenged: The popular write-off used by millions of American owners costs the government massive amounts of revenue, somewhere in the range of $100 billion a year.

This adds to the federal deficit and debt, and has ranked the deduction high on the hit list of most tax reformers' agendas. President Obama himself called for limiting it throughout his first term in office, and ran on a platform to pare down its costs in his re-election campaign. The compromise congressional tax package that ended the "fiscal cliff" crisis Jan. 2 also contained a limitation on the mortgage write-off, targeted at high-income taxpayers.

How much does allowing owners to deduct the interest they pay on their home loans really cost the government? Congress' technical experts have new estimates that should figure into congressional deliberations expected later this year on overhauling the federal tax code. Their findings: The mortgage write-off costs tens of billions of dollars less than the government previously believed.

The nonpartisan Joint Committee on Taxation published revised estimates indicating that because of changes in the economy and tax legislation, the cost of the deduction for fiscal 2013 will be $69.7 billion.

That's a dramatic reduction from the committee's own earlier numbers. In a projection released in January 2010, it said the cost of the mortgage write-off in fiscal 2013 would hit an all-time high of $134.7 billion. Under the revised estimates, costs will slowly rise into the $70 billion-plus range over the coming several years and will only exceed $80 billion in fiscal 2017, when they hit $83.4 billion.

There's no question that mortgage write-offs can be criticized for being skewed toward wealthier owners. But the fact remains: There's less fiscal meat here than previously advertised. The write-off is still a large and vulnerable target, but it's not as costly as widely portrayed.

The only significant increase in the revised projections: Thanks in part to improvements in the housing market, capital gains exclusions — the $250,000 and $500,000 amounts that single and joint-filing homeowners respectively get to pocket tax-free on profits when they sell their primary homes — will cost the Treasury $23.8 billion in 2013, rather than the $19.8 billion estimated in 2010.

Meanwhile, the IRS has released its latest instructions for owners seeking to take the mortgage-interest deduction in the coming tax-filing season. Among some noteworthy points:

• Thanks to the fiscal cliff tax bill, mortgage insurance premiums are deductible for tax year 2012. But once your adjusted gross income exceeds $100,000 ($50,000 if you're filing singly), your write-offs are subject to a phase-down schedule that reduces the deduction to zero above $109,000 ($54,500 for singles).

• The federal tax code contains a variety of restrictions — some of them complex — on whether and how much mortgage interest you can write off. For example, if you've got an office in the home, rent out a portion of your house, rent out your second home for significant periods of time during the year, paid "points" on a new mortgage or refinancing last year, there are special rules you need to know. Download the IRS's latest guidance on the mortgage interest deduction, Publication 936, 2012 revised edition, at irs.gov.

Comments
Yes, we have some bananas: Port Tampa Bay welcomes first shipment in 21 years

Yes, we have some bananas: Port Tampa Bay welcomes first shipment in 21 years

TAMPA — More than two decades after the last bunch arrived on shore, bananas are back at Tampa’s port. More than 3,900 pallets of Chiquita bananas from Ecuador arrived last week at the new Port Logistics Refrigerated Services warehouse.It was the fir...
Updated: 18 minutes ago
Grocery retailer Albertsons to buy drugstore chain Rite Aid

Grocery retailer Albertsons to buy drugstore chain Rite Aid

Associated PressThe privately held owner of Safeway, Vons and other grocery brands is plunging deeper into the pharmacy business with a deal to buy Rite Aid, the nation’s third-largest drugstore chain. Albertsons Companies is offering either a share ...
Updated: 2 hours ago
Following deaths from Irma, Florida looks to new rules for keeping nursing homes cool after outages

Following deaths from Irma, Florida looks to new rules for keeping nursing homes cool after outages

After national headlines and a public outcry over the deaths of 14 people at a Broward County nursing home after Hurricane Irma, nursing homes across the state are working to comply with new rules requiring them to have back-up power.But the process ...
Published: 02/20/18
Yoshi — car maintenance that comes to you — launches in Tampa Bay

Yoshi — car maintenance that comes to you — launches in Tampa Bay

A California-based company that promises to bring limited on-site car maintenance directly to you — from an oil change to a fill-up — has picked Tampa Bay as its next pit stop."Anything that your car needs, we’re going to bring to you," said Nick Ale...
Published: 02/20/18

Pasco Business Digest for Feb. 23

Business digestBrieflyLOCAL COMMUNITY RECOGNIZED: CHUY’S RESTAURANT TO OPEN: Chuy’s, the Austin-based Tex-Mex restaurant, will open its first Tampa Bay area location this spring near Cypress Creek Town Center in Wesley Chapel. The restaurant at 25750...
Published: 02/20/18
Epilogue: Tourism community remembers Paradise founder Cedar Hames

Epilogue: Tourism community remembers Paradise founder Cedar Hames

When Cedar Hames spoke, you listened.He was a natural storyteller, always dressed sharp to match his wit and natural elegance. He grew a two-person business in St. Petersburg into a leading tourism, advertising and marketing agency over an esteemed 3...
Updated: 3 hours ago
St. Petersburg set to rename main library after President Obama

St. Petersburg set to rename main library after President Obama

ST. PETERSBURG — Speaking in front of a small crowd gathered on the front lawn of the city’s main library, Mayor Rick Kriseman announced Monday that the facility will get a $6 million renovation and be renamed in honor of President Barack Obama.The a...
Published: 02/19/18
Sheriff’s undercover sting nabs 26 ‘brazen’ unlicensed contractors

Sheriff’s undercover sting nabs 26 ‘brazen’ unlicensed contractors

DUNEDIN –– Pinellas sheriff’s detectives spent their weekend luring in unlicensed electrical, plumbing and other home improvement contractors to a vacant home wired with cameras.It took only hours before a stream of people arrived to work on the outd...
Published: 02/19/18
Tampa Electric appeals OSHA citation for fatal Big Bend accident

Tampa Electric appeals OSHA citation for fatal Big Bend accident

TAMPA — Tampa Electric Co. is formally contesting the biting citation the federal Occupational Safety and Health Administration handed down in December for a maintenance incident in June that left five workers dead.At a meeting with the Tampa Bay Tim...
Published: 02/19/18
On deck in Rays ballpark quest: Tampa Bay’s business community

On deck in Rays ballpark quest: Tampa Bay’s business community

TAMPA — Columbia Restaurant owner Richard Gonzmart says he’s ready to put his checkbook where his heart is when it comes to supporting a Tampa Bay Rays move to Ybor City.So is the investment fund for the founding family of Ashley Furniture. So, it ap...
Published: 02/19/18