Move Over, Homeowners—Renters Could Get Tax Breaks, Too
It’s been said many times: The rent is too high. And now a recently introduced bill is trying to cut renters a break—a tax break, that is. The bill, if it became law, would allow renters to deduct from their federal taxes what they pay for the primary roof over their heads—a proposal that could save them thousands per year. “There’s an unequal treatment now of owners and renters,” says Rep. Alan Grayson, a Democrat from Florida, who introduced the bill. He hopes this bill would level the playing field. For example, the average taxpayer shelling out about $1,500 a month (or $18,000 a year) could potentially save $4,500 annually through the deduction if he or she is in the 25% tax bracket, he says. “Renters should be able to share in the tax savings,” he says. “This is a tax benefit that would go primarily to people who need it.” About 37% of U.S. households were renters in 2015, according to a recent report from the Joint Center for Housing Studies of Harvard University. And 49%, or 21.3 million, of renters were considered cost-burdened (that is, they plunked down more than 30% of their paychecks on housing) in 2014. Meanwhile 26%, or 11.4 million, were severely cost-burdened, shelling out more than half of their earnings each month. Read more.