Homeowner Tax Credit is Still Here!
No… Not that flash in the pan backward $8,000 stimulus credit… The real Homeowner credit! The Credit that has been here in the form of deductions all along… Still here!
What am I talking about? The IRS allows you home mortgage interest along with your property taxes to be deducted from your income on Schedule A of your federal tax return. That means if you have a $250,000 mortgage at 4.75% that’s over 11,500 in interest. If you add that to a $4,800 property tax bill you would have a $16,300 tax deduction. You would need your actual tax bracket but let’s assume a net rate of 20% for federal taxes. $16,300 x 20% would be a $3,260 refund and you get to do this every year!
The smart money would adjust your W4 federal withholding and take home $271.67 more each month! That’s like giving yourself a raise…
If you are considering a home purchase in the current year don’t forget about the tax saving associated with home ownership. Remember it’s not what you make but what you keep that is really the bottom line.
For more onfo check out “What can we afford”
By Bill Frantz PaFhaMortgage.com