Finding Out the Tax Benefits of Homeownership

We discussed about the 7 Great Advantages to Own Your Home. One of the advantages is that it provides a homeowner tax breaks. The tax deductions you’re eligible to take for mortgage interest and property taxes greatly increase the financial benefits of homeownership.

Here’s how it works.

Assume: $9,877 = Mortgage interest paid (a loan of $150,000 for 30 years, at 7 percent, using year-five interest)
$2,700 = Property taxes (at 1.5 percent on $180,000 assessed value)
 ______
$12,577 = Total deduction

Then, multiply your total deduction by your tax rate.
For example, at a 28 percent tax rate: 12,577 x 0.28 = $3,521.56
$3,521.56 = Amount you have lowered your federal income tax (at 28 percent tax rate)

Read the full article here in our Tampa Real Estate blog.