Now you own a home and all the benefits that come along with it. One of those benefits is the mortgage tax deduction on your state and federal taxes. Every dime you pay in interest on you mortgage is a deduction off your gross income on your taxes and can mean a tax savings of thousands of dollars.
Most people don't realize on $200,000 loan at 6% in the first year you pay almost $12,000 in interest on your mortgage. If you took that $12,000 and deducted it from you gross income, would that help you year end tax bill to Uncle Sam? You bet it would and no one wants to pay more taxes than they have to.
There are other tax write off that you can get on your home that you couldn't get when renting. Do you want to do some home remodeling to bring up the value of your property? Guess what, Uncle Sam says GREAT! We will give you a tax write off for that too. To find out more about home remodeling and tax deductions, stay tuned for one of my up coming blogs on the subject.
If you are presently renting and considering a home purchase, buying a home for the same dollar amount you are paying in rent isn't comparing apples to apples. If you are paying $800 a month for rent, did you know you could possibly afford up to $1200 a month on a mortgage without a increase in pay? That is correct! Because of the deduction on your taxes, it will actually put more money in your pocket at the end of each month. Making it so you can afford more and you get something to call your own. Something that will increase in value over the years and you are paying your own mortgage off instead of someone else's.
Happy home ownership with a lower tax bill! For more information on all the deductions that your home has to offer, consult your tax advisor.