How does buying a home?

Question

affect my taxes at the end of the year? Does paying property taxes and home owners insurance have anything to do with taxes?

Answer 1

In a mortgage, your interest gets paid off first,

then you start paying on your principle. <}:-})

Answer 2

You can deduct property taxes and mortgage interest on schedule A - Itemized deductions, but only do so if the total of schedule A is more than the standard deduction.  For 2007, the standard deduction for Single was $5350, Married Filing Joint $10,700.  So if you are married and your schedule A total is less than $10,700 then it does not effect your taxes at all.

Answer 3

Generally, you will have income tax deductions for: (1) Interest actually paid on your mortgage; (2) Property taxes actually paid; and (3) Sometimes, a part of any "points" you paid on the mortgage (discuss this one with a tax preparer).

You will receive a statement at year end from your mortgage company with these totals, kind of like getting a W-2 with your income information for tax purposes.

Homeowners insurance does not affect your taxes.

Answer 4

yes, it affects it. You will get to claim the morgage interest and property taxes and also any points you paid at closing. However, the standard deduction for a married couple is 10,500 and I believe 5,500 if you are single so you would have to pay more than that amount in interest/taxes or have other expenses that you deduct for it to be to your benefit. Hop I was able to help.  

Answer 5

Real estate taxes and mortgage interest are allowable as itemized deductions, so if the total of those plus any other deductions you have is larger than your standard deduction, you'll itemize which means your tax will be lower.

The first year, it might not matter if you bought the house mid year, since you'd only have part of a year's deductions.  And many people think they'll get huge amounts off their tax bill - it's often several hundred dollars but rarely a lot more than that unless your deductions are huge.

Home owners insurance has no effect on your taxes.

Answer 6

The interest you pay on your mortgage is deductible. Depending on the size of your mortgage, it may exceed the standard deduction, which can lower your taxes or increase your tax refund.

Answer 7

Yes.

Answer 8

Interest on the mortagage as well as property taxes are deductible. If you pay points up front, you can deduct all of that the forst year, a nice little tax bonus.

Answer 9

You get to claim all the mortgage interest you pay and all the property taxes you pay on your federal income tax. For most people, this lowers their tax bill substantially.