Income Tax Savings
Because of income tax deductions, the government is basically
subsidizing the purchase of your home. All of the interest
and property taxes you pay in a given year can be deducted
from your gross income to reduce your taxable income. For
example:
Assume your initial loan balance is $150,000 with an interest
rate of eight percent. During the first year you would pay
$9969.27 in interest. If your first payment is January 1st,
your taxable income would be almost $10,000 less – due to
the IRS interest rate deduction.
Excellent News..
Property taxes are deductible, too! Whatever property tax
you pay in a given year, it may also be deducted from your
gross income, lowering your tax obligation.
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