Help for Home Buyers Likely, But Student Loan Forgiveness Could Cost More
As mortgage foreclosures rise to new record highs, there is good news on the legislative front for new homeowners: Congress is working on bills that could enhance existing tax breaks.
But developing tax law could be bad news for law graduates in government and nonprofit jobs who are now benefiting from education loan forgiveness programs offered by a growing number of law schools. Actual or effective debt payments by the schools on graduates’ behalf could be considered taxable income, although the issue isn’t yet settled, reports the Wall Street Journal. Several law school administrators have asked the Internal Revenue Service for guidance, the newspaper notes.
Among the proposals under consideration to help homeowners are a $7,500 tax credit for first-time homebuyers and a one-year increase in the standard income-tax deduction, to allow even those who don’t itemize to deduct mortgage interest.
