newb home owner.

Dec 10, 2019 14 Comments

purchased a home this year and need to understand how deducting property and sales tax works. i have googled this but i need an explicit answer. i understand that property taxes and interest reduce your AGI but does this mean i should expect a tax refund come march?

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TOP 14 Comments
  • Slalom Consulting qEje84
    TurboTax
    Dec 10, 2019 0
  • Cisco Be_happy
    How is owning a home compared to renting on a monthly basis?
    Dec 10, 2019 6
    • Apple brahma
      I m a homeowner in San Jose. My monthly expense is ~20% higher than my rent would have been (even after taking into account tax savings) . I know that’s the case for most homes in this area based on Zillow estimates and a simple rental investment calculator. The primary motivation for homeownership here has been appreciation. With 5x leverage on $1m+ home, a few % appreciation every year can easily offset the higher ownership cost and generate gains longer term. But home prices have been declining for the past year or so. Unlikely that appreciation will return to the pace of past decade. So it’s a very tough call at the moment. My 2 cents.
      Dec 10, 2019
    • IBM / Data bbWI22
      as a home owner in San Jose, my monthly expense is around the same as renting, but I do have “housemates” i.e. tenants who pay me rent
      Dec 10, 2019
  • Uber
    cool-int

    Uber

    BIO
    I coach people for behavioural interviews at high tech companies like Amazon, FB, Pinterest etc.
    cool-intmore
    Use this calculator to find out if you get any tax benefits and also how much depending on your income https://chalkyourfuture.com/home/mortgage-calculator-with-taxes/
    Dec 10, 2019 0
  • You need to itemize your return and give up on standard deduction. So it only makes sense if you are paying a lot (12k/year+) interest.
    Dec 10, 2019 1
    • IBM / Data bbWI22
      Actually only 2k/year+ in interest assuming property tax + state income tax exceeds 10k
      Dec 10, 2019
  • Wurth USA 1BM1
    You might not get as much reduced your first year of ownership compared to future years. One main reason is that you haven’t had a full year to get as much as possible to write off. To be safe, take your tax documents to a professional. This way he/she can make sure you get as much as you can off your taxes. The following years will be much better.
    Dec 10, 2019 0
  • Microsoft VhIT48
    Owning you get all the equity upside
    Dec 10, 2019 0
  • OP
    Yes the amount is more than my standard deduction. So it does make sense to itemize. However, my question is does the tax benefit come in the form of a higher tax refund?
    Dec 10, 2019 0

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