I’m currently working 70 hours a week and commuting 10 hours a week. Should I spend 3 hours a day in the car instead of 1.5? Like, there just aren’t many options.
Only one I can think of would be moving to a deep red state with a lower cost of living and a casino with good 2/5, but I’d be subjecting my wife to even more racism, and no reproductive rights. So that’s a non-starter.
Take something like Dayton, OH. Based on 2s of google, average home price is 130K. I don’t think it qualifies as out in the sticks. It has it’s own airport and is close to two much larger metros.
Do I want to live there? Of course, not. Could a nurse and a pro poker player live there and own a home? I don’t think that’s a stretch. Would they want to? Probably not, but that’s a different question.
Dayton, OH is just the first example that came to mind, but I’m sure there are others out there.
Racism is not really a red/state blue state thing as much as it is a urban/rural divide. Texas is red, but are you really saying that she would face dramatically more racism in Austin than Pittsburgh or Philly.
Also I’m sure Pennsyltucky has plenty of racism. You don’t even need to leave the state for that.
I think if we spent a few hours we could find something that would meet your above requirements. Close to 2/5 + abortion access + large enough metro + affordable housing. I’m also sure you still would not want to live there.
I haven’t been to either in about a decade, but the Turning Stone and Foxwoods may still be possibilities.
Dayton is actually one of the next up and coming cities. It’s actually a great value now, although my guess is that will get ruined in the same way Austin has been. But it definitely has some significant issues. It’s like a nicer Memphis with worse food.
EDIT: That’s actually not me shitting on Dayton’s food, Memphis food is pretty good.
I was looking at this today. My mortgage was originally 860k. Today it’s lower than 750k, but I only get to deduct 87% of my mortgage interest. Now I wish I had done 750/110 originally! I am above the threshold and itemize, but it’s close. For somebody with a better interest rate, standard would be the way.
2017 was quite a tax increase for where I am. Capping the state tax deduction is a killer.
Not sure what level you’re on. But that’s an easy game to play. Let’s check where CW lives now, which I assume is fine.
Mortgage interest doesn’t fall under the SALT cap. You can deduct up to $10k on the SALT line, which every middle class homeowner family in a reasonably taxed state will hit. The mortgage interest line is capped by the amount of the loan at $750k. So the deduction amount is theoretically unlimited, but if you’re “capping” you’re paying at least $20k/year in interest even if you refinanced at rock bottom rates.
So it’s a cap that only affects the very rich, but if you’re hitting it you’re going to itemize. New mortgages post-interest rate normalization are going to want to itemize well below the cap. I’ll revise my numbers down to ~100% on that cap alone and even lower for homeowners in general but that’s because I forgot how hard the tax changes hit married couples. Single homeowners will itemize much more easily. Also consider:
It’s not this simple because you need to consider the impact on state taxes, which can be significant. It’s why there’s a box you can check on your federal return acknowledging that your itemized deductions are below the standard deduction but you’re choosing to itemize anyway. And your numbers are for married couples. If you’re single and maxing SALT you only need to make up $3850 in mortgage interest. Big difference! 
Also I’m aware that we’re talking about marginal benefits here. If you own a home and you’re trying to figure out if it’s worth itemizing I’m saying there’s a good chance the answer is still yes, even if you’re married. Wanting to buy a home for the tax benefits is a different story. We’re talking a few hundred dollars in benefits over the standard deduction in most cases. In general I’m more aligned with Melkerson in the thought that renting can be a better financial decision (and is almost certainly superior today).
I’m pretty sure this is not correct. The $750k applies to your average loan balance throughout the year. It doesn’t matter how much the original loan was. If you were under $750k remaining all year you’re uncapped. If you dropped below $750k during the year you still might be uncapped after you find the average, and in either case you’ll be uncapped next year.
You are right, it isn’t using the original amount. The number looked similar to the original amount, but it was my Jan 1 balance.
The form 1098 has in box 2 “Outstanding mortgage principal as of 1/1/2023”. That is 868k, and Turbo Tax is letting me deduct 750/868 * interest paid in 2023. The average is well below 750. Let me know if you think Turbo Tax is wrong (I’m sure they have issues).
I looked up the form and I think Turbo Tax is doing it wrong. They are just using the Jan 1 balance and they should be using the average. I was surprised the average is still over 750k but regardless they are short 1200 in their calculation.
Sounds like file through TurboTax (if I’m reading it right and they are over crediting you) and blame them if it’s wrong and the IRS asks lol.
I think it’s the opposite, TT is under-crediting by using the balance from the start of the year (which is higher, and more over the cap leading to a smaller credit).
My head hurts. Thank god I don’t have to deal with this shit
TT is doing it wrong, has been doing it wrong for some years, and nobody cares. Most of the people who notice sell and buy a home in the same year and then TT gets it very obviously wrong.
The way they do it will always cost the taxpayer money, never win.
I fixed it by changing line 2 from Jan 1 balance to the average balance. This input doesn’t get filed, it just causes TT to calculate correctly.
Thanks @d10 for knowing this and sharing.
I think Krayz is right about this. If it’s using your balance at the beginning of the year, that’s going to be higher than your average balance, which will result in a higher deduction than you’re actually entitled to. If TT does this you could try filing as is and if the IRS catches it you have a great excuse to avoid criminal tax fraud. And if they don’t, free money. Sounds like it doesn’t matter this year but next year it would.
On the one hand, it’s good to know you didn’t miss an obscure tax law when buying your house that will cost you for the remainder of the mortgage. And missing tax breaks due to arbitrary caps isn’t fun psychologically. But on the other hand when you get under the cap your deduction gets lower.
Dayton would be about an hour away from a poker room. Austin is a place we discussed, but the lack of reproductive rights and potential other crazy Republican shit is a non-starter for us, at least long term.
Long term we want to be somewhere I can play at least 5/T and preferably T/20. If the requirement was just 2/5, we could probably find a place. It’s possible that we could actually have a better standard of living in some low cost of living place with me playing 2/5 than in other places at 5/T… But T/20 should be a game I make enough more to offset it.
The best combo of cost of living and 2/5 is probably Biloxi, but obviously we’re not looking to live in Mississippi.
Foxwoods is pretty dead I think, and I’m not sure about Turning Stone but I’ve heard it’s just a 1/3 room mostly. I want to make a trip there during a WSOP Circuit and swing over to Syracuse, but not sure it’ll happen.
Maybe I’m misunderstanding something but it sounds like the balance you give TT only matters for the purpose of figuring out if you’re over the limit or not, no? High balance is bad, if your balance is <$750k you get to deduct all the mortgage interest you paid and if it’s >$750k you can only claim (750k / your balance) percent of the interest.