F2 Wednesday, June 5, 1985
The $5,000 threshold alone would be enough to keep intact the interest deductions of the vast majority of taxpayers.</br></br>In 1983, deductions were itemized on 35.2 million, or just over one-third, of the 96.3 million individual income tax returns filed. Taxpayers claimed deductions of $307.1 billion, with interest deductions heading the list at $132.5 billion, or about 43 percent of the total.</br></br>But more than 85 percent of the interest deductions were on home mortgages. About $7.7 billion was deducted for interest on charge accounts and credit cards and $36.5 billion for ÛÏotherÛ interest payments, a category not broken down further by the Internal Revenue Service.</br></br>A breakdown of interest-paid deductions other than for home mortgages is available only through 1982. IRS statistics show an average deduction of about $1,000 for taxpayers with adjusted gross incomes of $20,000 to $25,000 that year. The average was still only $2,237 for taxpayers in the $50,000 to $75,000 group.</br></br>Of course, some taxpayers in any income group could be deducting more than $5,000 worth of interest paid other than for home mortgages. On the other hand, interest deductions tend to rise along with income, and the higher a taxpayerÛªs income, the more likely that there will be investment income to be added to the $5,000 threshold to determine the new limit on deductibility.