The Lawhead Team recently sent an email to Barbara Boxer and Diane Feinstein in the US Senate asking for her support in continuing to allow mortgage interest as a tax deduction so millions of Americans can enjoy the benefits of home ownership and live the American Dream.

We received messages back from both Barbara Boxer and Diane Feinstein in regards to allowing mortgage interest as a tax deduction and wanted to share the responses with all our readers:

Dear Mr. Lawhead:

Thank you for taking the time to write and share your views with me.  Your comments will help me continue to represent you and other Californians to the best of my ability.  Be assured that I will keep your views in mind as the Senate considers legislation on this or similar issues.

If you would like additional information about my work in the U.S. Senate, I invite you to visit my website, http://boxer.senate.gov.  From this site, you can access my statements and press releases about current events and pending legislation, request copies of legislation and government reports, and receive detailed information about the many services that I am privileged to provide for my constituents.  You may also wish to visit http://thomas.loc.gov to track current and past federal legislation.

Again, thank you for sharing your thoughts with me.  I appreciate hearing from you.

Sincerely,
Barbara Boxer
United States Senator

Dear Creighton:

Thank you for contacting me to express your concerns about proposals to limit the mortgage interest tax deduction.  I appreciate the time you took to write, and I welcome the opportunity to respond.

As you know, Congress is currently debating ways to increase revenue and cut spending in an effort to address our national debt.  One proposal to raise revenue would limit the value of itemized deductions, specifically for high income earners.  President Obama proposed limiting the mortgage interest tax deduction in his Fiscal Year 2013 (FY2013) budget as part of an effort to reduce federal tax expenditures and address our growing debt and deficit.  It is important to know that his proposal would have only reduced the tax deduction for individuals who earn over $200,000 and married couples filing jointly who earn over $250,000. 

Congress voted on January 1, 2013 to pass the “American Taxpayer Relief Act” (H.R. 8), which temporarily averted sequestration spending cuts required by the Budget Control Act (Public Law 112-25) and prevented the implementation of significant tax rate increases on middle class Americans.  Specifically, this legislation permanently maintains current tax rates for all Americans on income under $400,000 for individuals and $450,000 for couples.  This legislation did not create new limits on deductions, though it is important to note that it did reinstate the Pease provision, which will, in effect, limit the value of tax deductions for certain upper income earners.  It is also possible that future negotiations to reduce the debt will include proposals to limit tax deductions. 

Like you, I strongly believe the federal government must do more to help distressed homeowners and stabilize the housing market.  I am also concerned that with home prices in California high relative to the rest of the country, proposals to limit this deduction– depending on how they are structured – could disproportionately impact middle class Californians.  Please know that I have made careful note of your support for this deduction, and I will keep your thoughts in mind as I work with my colleagues to address our national debt in ways that do not unduly harm California homeowners. 

Once again, thank you for writing.  If you have any additional questions or concerns, please do not hesitate to contact my Washington, D.C. office at (202) 224-3841, or visit my website at http://feinstein.senate.gov. Best regards.

Sincerely yours,
Dianne Feinstein
United States Senator

Trying to convert the sun’s rays into electricity doesn’t make sense for every homeowner. For the solar panels that typically sit on your roof to be really effective, they need exposure to direct sunlight for at least five hours a day.

Fortunately, living in California, there is no shortage of sun so solar panels can be a great way to take advantage of the sun’s energy.

If your electric bills are high and your house receives sufficient sunlight, solar panels are probably a sustainable and energy-efficient alternative to consider.   An expanded federal tax credit for solar-panel systems, also known as photovoltaic systems, makes them even more affordable to install.

Solar-panel systems are classified by watts of capacity. Systems under 10 kilowatts—1 kilowatt equals 1,000 watts—are primarily for residential use. The average size of a residential solar-panel system is 5.2 kilowatts.
Costs vary by state, but in general systems are cheaper in places like Arizona and California, where electricity is expensive, sunshine is plentiful, and solar has gained wider acceptance.

Systems installed between Jan. 1, 2009, and Dec. 31, 2016, are eligible for a tax credit equal to 30% of the cost. To qualify, the system must supply electricity to a residence and meet local building codes. In 2008, the federal tax credit was capped at $2,000.
That means a 5.2 kilowatt system installed between 2009 and 2016 that costs $44,200 would, in theory, earn a federal tax credit of $13,260 vs. just $2,000 before 2009. That’s an extra $11,260 in savings, in addition to local and state incentives. (This is a simplified example. Consult a tax adviser.)  The tax break can be applied to a solar panel system installed at your primary residence or second home.

A typical residential system should lower your electric bills by 25% to 50%, says Monique Hanis, a spokeswoman for the Solar Energy Industries Association. The average household pays about $100 a month for electricity, according to the Energy Department, so a solar-panel system should save you between $300 and $600 a year.

The payback period will vary greatly depending on where you live, the size of your system and its post-incentives price tag, and future swings in electricity costs and consumption rates. Figure it’ll take anywhere from six to 18 years, says Hanis. Solar panels have a life span of 20 to 30 years.
Producing excess energy can accelerate how quickly you’ll recoup your investment. A battery can store extra electricity for later use, or you can sell surplus energy back to the utility company in a practice called net metering. Many cities have net metering in place, but check with your utility company before you install solar panels.