Letter: Do the math on rec center
October 2, 2013
Do the math on rec center
With the coming vote in the midvalley for a recreation center, there seems to be a great deal of questions on what the actual out-of-pocket cost to homeowners will be in the taxing district.
It is important to note that real estate taxes are a deduction against your gross income on your federal and state income tax return, just as the interest on your mortgage is a deduction.
So, if your real estate taxes go up $400, for example, the result is that your out-of-pocket cost is reduced by your tax rate. For example, if you are in the 30 percent tax bracket, or rate, your actual out-of-pocket cost is 30 percent less than the real estate tax increase. For example, a $400 increase in real estate taxes as a result of the Crown Mountain Recreation Center, at a 30 percent tax rate, would result in an out-of-pocket expense of only $280.
On the other hand, if you were to purchase $400 in ski equipment or bike gear, a dinner in Aspen, a River Valley Ranch summer tennis membership, an airline ticket, or a private membership in a health club, it would require you to earn $57. You would then pay the income tax on the $575, which would leave you with about $400.
The difference of $295 savings is a very strong argument for the Crown Mountain recreation center. As always, check with your personal tax advisor to access you personal tax situation. You might be saving even more.
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