If you own a home or are thinking about buying one in the
near future, you should know about mortgage interest deductions, which
basically allow you to subtract any income you spend paying interest on your
mortgage loan from your taxable income, which will end up reducing how much you
have to pay in taxes.
In the early stages of owning your home, this nice little
“bonus” of lowered taxes can really help. Don’t get too used to it, though,
because as your interest is reduced over time, your deduction will also get
reduced. However, saving something is always better than saving nothing, right?
Of course, some exceptions do apply. To start with, you’ll
only enjoy this break on up to two homes and only on the first $1 million of
any mortgage. That’s because this benefit was designed to help lower to middle
class citizens and to make home ownership more attainable and more beneficial
to them. On a nice note, other, similar deductions and credits are available to
help make home ownership a little bit easier on the average wallet!
One great deduction is the real estate tax deduction, which
lets you deduct property taxes on your home from your taxable income. Again,
this benefit is good for up to two homes. To learn more about other potential
benefits of home ownership and how to take advantage of and make the most of
them, be sure to talk with your tax adviser.
It’s especially smart to speak with a tax professional even
before you buy a home so that you can go ahead and plan your budget with all
possible savings factored in, but, even if you’ve already made your home
purchase, it’s never too late to take advantage of the options available to
you!
