WASHINGTON -- Average U.S. rates on fixed mortgages fell this week to their lowest point in two months. The decline follows the Federal Reserve's decision last week to hold off slowing its monthly bond purchases.
Mortgage buyer Freddie Mac says the average rate on the 30-year loan dropped to 4.32 percent from 4.50 percent last week. The average on the 15-year fixed loan declined to 3.37 percent from 3.54 percent.
Both are the lowest averages since July 25.
Mortgage rates are nearly a full percentage point higher than in May, when the Fed first signaled it might slow its $85-billion-a-month in bond buys. But last week the Fed kept the pace steady after lowering its outlook for economic growth.
The bond purchases are intended to lower long-term interest rates, including mortgage rates.
8 Things You Never Knew Were Taxable
Average 30-Year Mortgage Rate Down to 4.32%
It may seem like adding insult to injury to force workers who've lost their jobs to pay taxes on their unemployment checks. But with unemployment acting as a substitute for your regular wages, federal tax laws treat it the same way for tax purposes. Most states also impose income taxes on unemployment benefits as well.
Not all Social Security recipients have to pay taxes on their benefits, but if your income is above certain limits, then a portion of what you get in Social Security is subject to tax. To figure out what you owe, take half your Social Security benefits and add in your other income. For single filers, if the result is between $25,000 and $34,000, you might have to add in up to half your benefits as taxable income. Above $34,000, as much as 85 percent of your benefits could be taxable. The corresponding figures for joint filers are $32,000 and $44,000.
Many struggling borrowers seek debt restructuring deals with their lenders that involve having a portion of their outstanding debt written off. If you're fortunate enough to get banks to forgive part of your debt, the IRS will treat the amount forgiven as income and charge you tax on it. One big exception: forgiveness of mortgage debt on primary residences, which became a hot-button issue during the housing bust and the ensuing financial crisis.
If you get divorced, then the alimony payments that one spouse makes to the other are generally treated as deductible by the paying spouse and must be included in the receiving spouse's income. Keep in mind, though, that payments for child support are not the same as alimony and aren't includible as taxable income.
The tiny amount that most jurors get for doing their civic duty may seem insignificant, but Uncle Sam still wants his share. Jury duty is taxable unless you have a deal with your employer that requires you to turn it over in exchange for earning your regular pay.
Stories about lottery winners often bemoan the fact that after taxes, winners end up with far less than the official jackpot amount. But what many people don't realize is that all gambling winnings are taxable, and in most cases, you can't simply offset corresponding gambling losses. Instead, those losses have to be taken as itemized deductions and are subject to limitations. Casinos are required to report winnings of $1,200 or more on slot machines, while lottery winnings of $600 or more are often reported as well. You'll typically have to fill out a form with the casino to claim your winnings, and failing to report those winnings on your return will trigger a red flag with the IRS.
Students who are fortunate enough to get money from scholarships often don't realize the tax implications involved. Scholarships that go toward tuition, as well as required fees, books, supplies, and equipment, qualify for tax-free status if the student is in a degree program. But amounts for room and board and travel, as well as compensation for teaching or research, are subject to tax.
Many businesses offer rebates to customers for doing business with them, and often, those rebates aren't taxable. If the rebate effectively reduces the price of something you buy, then it's usually not taxable. But if you get cash or other gifts upfront just for opening an account, the IRS has a much better argument that it's taxable. Many companies offering those rebates report them on a 1099-MISC form, forcing you to include them on your return to avoid an IRS audit flag.
Tax season will soon be behind us for another year. But the complexity in figuring out what's taxable and what's not will be with us for a long time to come.