Maureen Megowan's Blog

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Income Taxes and Real Estate - Second in a Series

INCOME TAX BENEFITS OF HOME OWNERSHIP:The following link is a good summary of the tax benefits of home ownership, including a discussion of the tax deductibility of mortgage interest, property taxes, and other issues: http://www.finance.cch.com/text/c20s15d690.asp

To estimate the tax benefits of your proposed home purchase compared to renting, click here.You should use the "marginal" tax rate, which is the tax rate that your last dollar earned during the year is taxed at. Use the IRS tax table to estimate your marginal rate (look at the table and use the rate for your total taxable income you expect for the year) based on whether you are single, married or head of household.  This will give you an estimate of the  tax savings you will enjoy compared to if you were to take the standard deduction for federal purposes (the calculator includes points paid to the lender in the first year--your tax benefits in future years will be less). The program asks you to input the state tax rate. You should, of course, consult with your own tax professional in evaluating the tax ramifications of your home purchase and should not rely on these calculations in making your home purchase decision.

**NOTE: The information contained at this site is for educational purposes only and is not intended for any particular person or circumstance. A competent tax professional should always be consulted before utilizing any of the information contained at this site.**

For more information about Palos Verdes and South Bay Real Estate and buying and selling a home on the Palos Verdes Peninsula, visit my website at http://www.maureenmegowan.com . I try to make this the best real estate web blog in the South Bay Los Angeles and the Palos Verdes Peninsula. I would love to hear your comments or suggestions.

Comment balloon 3 commentsMaureen Megowan • August 30 2009 04:43PM

Comments

So, true.

Posted by Lorraine or Loretta Kratz, Certified Negotiation Consultants (Crescent Moon Realty, Inc. & Land N Sea Auctions.) about 9 years ago

I a person works for the un, gets paid throught the un in the us... can state property taxes on a home be deducted from the federal taxes???  Do UN employees pay taxes?  Just wondering,. this question came up this weekend and I didn't have the answers.

Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) about 9 years ago

Hi Maureen I hope the market has been very good to you this week. What a great post on summary of the tax benefits for home owners. Keep the tips coming. Hope to work with ya soon.

David

Posted by David Salvato (David Home Inspection Service Home Inspector San Bernardino) about 9 years ago

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