Pittsburgh Pennsylvania Home Buyer FAQs...
What Kind of Tax Advantages Are Available To Me As A Homeowner?
When it comes to lowering your taxes, homeownership is one of the best options available!
Many people continue the frustrating life of a renter because they don't think they can afford a home, or because they don't realize the positive impact it will have on their overall financial standing.
Typically homeowners can take several deductions on their income tax return all related to the cost of their home, most notably, the interest paid on the mortgage for a primary residence and real estate property taxes. You may also be able to deduct loan fees or certain moving costs in the year your home is purchased. If your new home includes an office that is used regularly and exclusively as the primary place of business, you may be able to take additional tax deductions.
It's important to consult with a professional tax advisor when determining your eligibility for specific deductions and when preparing your tax return.
Here's an Example Tax Analysis Breakdown:
Sales Price of Home: $100,000
Loan Amount: $95,000
Interest Rate: 6.125%
Loan Term: 30 Years
Monthly P&I Payment: $577.23
Annual Taxes: $2,000
Total Monthly Payment (PITI): $803.48
First Year Interest Paid: $5,787.11
First Year Real Estate Taxes: $2,000.00
Available Tax Deduction: $7,787.11
Tax Benefits Based on Tax Rate:
Annual Tax Savings With 28% Tax Bracket:
Annual Tax Savings With 31% Tax Bracket:
Annual Tax Savings With 36% Tax Bracket:
Monthly Tax Savings With 28% Tax Bracket:
Monthly Tax Savings With 31% Tax Bracket:
Monthly Tax Savings With 36% Tax Bracket:
Net Monthly Payment After Tax Savings - 28% Tax Bracket: $621.78
Net Monthly Payment After Tax Savings - 31% Tax Bracket: $602.31
Net Monthly Payment After Tax Savings - 36% Tax Bracket: $569.87
Every person's tax situation is different. The figures listed here make a number of assumptions about your tax situation. Use the estimates to give yourself a feel for what a difference a home mortgage might make for an "average" person. We strongly recommend you consult with a professional accountant or qualified tax consultant for specifics concerning you possible tax savings.