Tax Benefits of Homeownership

Jan 8th, 2014 | By | Category: Neighborhood News

tax-benefit

The tax deductions you’re eligible to take for mortgage interest and property taxes greatly increase the financial benefits of homeownership. Here’s how it works.

Assume:

$9,877 = Mortgage interest paid (a loan of $150,000 for 30 years, at 7 percent, using year-five interest)

$2,700 =Property taxes (at 1.5 percent on $180,000 assessed value

$12,577 = Total deduction

Then, multiply your total deduction by your tax rate.

For example, at a 28 percent tax rate: $12,577 x 0.28 = $3,521.56
$3,521.56 = Amount you have lowered your federal income tax (at 28 percent tax rate)

*Please note that IRS tax codes do change, so check IRS.gov or consult with your CPA for up-to-date information.

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