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As a rational and somewhat cynical person, I always saw things like dman and mathjak.
But now, simply trying to make the best of it...
While on the topic of these deductions, what else house-related is deductible?:
- mortgage interest
- real estate taxes
- part of closing (origination fee, points if any, what else?)
- is the mortgage tax (tax on the mortgage) deductible?
- other? (are any repairs, or moving costs, if staying within the area, deductible?)
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In the broader sense, what other things do you deduct? - I have been doing standard deductions for years, so never bothered to save receipts...
If we are married and in the 25% tax bracket and our Property Tax bill is $9800, what can we expect back? Even a ballpark guess?
It all depends on what your other deductions are, but best case scenario looking very simplisticallyis a $2450 reduction in tax owed on the $9800 you already shelled out. This could mean you owe less at the end of the year or get a bigger tax return than you would have renting.
Of course, if you were renting, you would have never paid out the $9,800 in the first place.
first off the deduction isnt a benefit. your spending 3 or 4 dollars above the price of the house to get back one. your far better served with no extra expense and no deduction.
you also dont see a dime extra before you clear the standard deduction .
both a renter and home owner get the same standard deduction.
you can be a homeowner couple but if your deductions dont top 11,900.00 you wont see one penny difference even if you paid interest and real estate taxes..
it can really be the renter who wins tax wise. he may not be spending anywhere near 11,500 in deductable expenses and pockets the rest as a refund without actually spending that much.
the homeowner may be pulling that extra dough right out of the piggy bank to pay those bills and gets nothing back until the standard deduction is passed.
what is that poster talking about with investment properties?????????
real estate taxes are deductable on your primary home as long as you dont trip the amt tax .its deductable on any property you own as well..
I meant it's a benefit versus being a renter and not being able to claim anything on a tax return. There's some offset, albeit, not a ton but it's better than nothing . When we rented we had no kids, no properties and we made a decent salary. Our tax returns were horrible unless we itemized. Then we moved into a co-op and we had a child so we had some deductions. But that's a whole other topic.
I have no idea what the poster meant by investment properties. That can be pretty technical.
I meant it's a benefit versus being a renter and not being able to claim anything on a tax return. There's some offset, albeit, not a ton but it's better than nothing . When we rented we had no kids, no properties and we made a decent salary. Our tax returns were horrible unless we itemized. Then we moved into a co-op and we had a child so we had some deductions. But that's a whole other topic.
I have no idea what the poster meant by investment properties. That can be pretty technical.
It's not really better than nothing..you're shelling out $7K in property taxes for a house after the rebate. With a rental there's none.
With a rental there's no equity of course, but with a house there's upkeep. Simple fact is it's not a slam dunk to buy like many people lead you to believe.
so if deductions are such a good thing why not pay more in taxes and mortgage interest????????????? the answer is your pulling 4 dollars out of your pocket over and above the price of the house which you arent counting as being spent when you get back 1 of them as a tax refund.
folks wake up with these deductions,they arent a good thing. these bills your paying for taxes and interest are no different than your electric bill,your gardner , the water bill or your cable bill. the fact you get a rebate of a buck or so doesnt make it any better or a benefit. its all just an expense.
the deduction reduces the expense but its not helping your income at all. want to help your income ,get rid of the expenses and get rid of the deductions.
Who said anything about deductions helping income? The point I was trying to make is that the other poster said only investment properties were tax deductible. Of course I didn't buy my house for the deductions but my point was at least there is some relief versus being single or married with NO deductions at all. If there wasn't some benefit to it then why would the IRS allow the deductions at all?
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Buying a house for the deductions is delusional.
But once you buy, you have no choice but to try to recoup your losses as much as possible.
Since the property taxes alone will trump the standard deduction, I am looking to pile up other stuff - all those "hidden treasures" I have been missing on while doing standard deductions for years. Like anything house-related, but also things like tax on a new car purchase, or a trip that is half-business and half-pleasure... or ?
I think it may be time to find a knowledgeable accountant .
Again ,there really is no relief in spending 4 bucks extra to get back one.
the only bottom line you can really compare is renting vs owning and see how that shapes up but without comparing the same property you cant really even
compare.
im pretty sure most of us can find a place to buy in the area we are in thats cheaper to own then rent but you really have no way of doing an exact comparison .
its like we live in a rental apartment with an equivelent price for it as a co-op we can buy. the differences is clearly about 1k more a month to buy so we can clearly see its not worth buying.
just the return on the money we would tie up buying pays our rent and maintaince charges would still run 1k a month more.
even getting a part of that back in taxes makes it still not worth it.
Last edited by mathjak107; 06-06-2012 at 09:28 AM..
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As a rational and somewhat cynical person, I always saw things like dman and mathjak. 
