Could Renters Get a Tax Deduction Soon?

A new bill hopes to provide some relief to renters who are faced with skyrocketing rental costs – by giving them a tax break.

If approved, the bill would allow renters to deduct what they pay for rent from their federal taxes.

Rep. Alan Grayson, a Democrat from Florida — who introduced the bill — cites the following example: Average taxpayers paying about $1,500 a month – or $18,000 a year – could possibly save $4,500 annually through the deduction if they fall in the 25 percent tax bracket.

“It could help renters who are looking to become home owners, because it will lower their housing costs,” says Linda Couch, senior vice president for policy at the National Low Income Housing Coalition. “That savings could be put toward a down payment.”

Source: “Move Over, Home Owners – Renters Could Get Tax Breaks Too,” realtor.com® (March 2, 2016)