Property taxes

[NSHL10]

13K in taxes on a 40K salary??? How do you plan to pay the mortgage and eat? Are you at least selling another home to pay for this new one?

[2011littlehouse]

Originally Posted by Benz63

so then how much am I getting back if not all of it when tax time comes?

Ballpark figures:
with your $40k, with standard deductions etc, now you are probably paying something like $4k in taxes (around 10%).
With this house, and its $13k in property taxes, plus your mortgage - say $18k for the first year (mostly interest), your deductions become huge and you will pay almost no taxes - certainly <$1k.

That means, you may save about $3k in unpaid income tax.
That still leaves you with $10k paid out-of-pocket property taxes.

But first - are you sure you qualify for the mortgage (unless you mostly will pay in cash and borrow little)? You should have done some calculations of ALL potential expenses, and you should not think of them as recoverable from income taxes - those savings will be peanuts compared to what your expenses will be...

[Benz63]

Originally Posted by 2011littlehouse

Ballpark figures:
with your $40k, with standard deductions etc, now you are probably paying something like $4k in taxes (around 10%).
With this house, and its $13k in property taxes, plus your mortgage - say $18k for the first year (mostly interest), your deductions become huge and you will pay almost no taxes - certainly <$1k.

That means, you may save about $3k in unpaid income tax.
That still leaves you with $10k paid out-of-pocket property taxes.

But first - are you sure you qualify for the mortgage (unless you mostly will pay in cash and borrow little)? You should have done some calculations of ALL potential expenses, and you should not think of them as recoverable from income taxes - those savings will be peanuts compared to what your expenses will be...

Im not buying the house myself, i have a partner, And yes i qualify for mortgage, thanks alot for the info mate. i knew that i should have nice deductions considering my income.

[ocngypz]

Originally Posted by Benz63

Im not buying the house myself, i have a partner, And yes i qualify for mortgage, thanks alot for the info mate. i knew that i should have nice deductions considering my income.

Unless you file jointly, you only receive 1/2 the deductions.

[StephM]

Originally Posted by Benz63

Hi I have a question , I'm buying a house in school district 14 and the taxes are about 13k, do taxes stop rising after a certain point let's say after 15k?

When you buy a house on LI the assumption is that the taxes never stop increasing.

[kayo_michael]

dude, benz, a deduction does not mean a refund.

If you make 40k, and you pay 13k in deductable taxes, it just means you will get taxed on 27k of your income instead of 40k.

So if you stretch this logic, and say you make 40k, but pay an astonishing 40k in deductable taxes, you will be taxed on 0k of your income. In other words, you pay no income tax, but you're still out of pocket 40k. Follow?

the GOV isn't giving you your taxes back.

How long have you been paying taxes with this misunderstanding?

[ocngypz]

Originally Posted by kayo_michael

dude, benz, a deduction does not mean a refund.

If you make 40k, and you pay 13k in deductable taxes, it just means you will get taxed on 27k of your income instead of 40k.

So if you stretch this logic, and say you make 40k, but pay an astonishing 40k in deductable taxes, you will be taxed on 0k of your income. In other words, you pay no income tax, but you're still out of pocket 40k. Follow?

the GOV isn't giving you your taxes back.

How long have you been paying taxes with this misunderstanding?

And there's always the possibility of the dreaded AMT...................

[ovi8]

Originally Posted by kayo_michael

dude, benz, a deduction does not mean a refund.

If you make 40k, and you pay 13k in deductable taxes, it just means you will get taxed on 27k of your income instead of 40k.

So if you stretch this logic, and say you make 40k, but pay an astonishing 40k in deductable taxes, you will be taxed on 0k of your income. In other words, you pay no income tax, but you're still out of pocket 40k. Follow?

the GOV isn't giving you your taxes back.

How long have you been paying taxes with this misunderstanding?

more importantly, do not depend on this return and cut it close. Taxes will always go up, your salary may not. Hopefully your mortgage consultant will help you make the right call these days.