Mortgage Interest Deduction Can Save Taxpayers Big

Believe it or not, home owners frequently don’t itemize deductions and as a result, they could be overpaying their federal taxes by as much as $1 billion a year.

The Government Accountability Office, the research arm of Congress, reports that about 2.2 million home owners last year took the standard deduction on their tax returns rather than itemizing deductions. They paid $945 million more in federal taxes than needed. Home owners may not think they have enough write-offs to overcome the standard deduction. But if their mortgages are large or fairly new, they're probably wrong, says Larry Cox, owner of several Jackson Hewitt Tax Service franchises in the Denver area.

Why overlook this government gift? Some do-it-yourself taxpayers find itemizing deductions daunting; others may not have enough deductions to offset the increasingly generous standard deduction, speculated CPA Robert Burke of Jacksonville, Fla.

Source: Denver Post