how much do i get back on income tax if i bought a house for130,000.00 and income is 70,000.00?

Answer 1

Without the amount of deductible interest and property taxes and other personal info (e.g. martial status, number of dependents, etc), I can't answer your question, but I can give you some hope.

You might find that even in the first year that you purchased your first home that your itemized deductions easily exceed your standard deduction. In the first year, you can deduct "points" (a percentage e.g. 2% of the loan amount) to obtain your mortgage provided that your down payment equals or exceeds the points (otherwise you write the points off over the term of the loan). You can also deduct property taxes. Generally, the points appear on your closing statement from your title escrow company or on your loan papers. As for property taxes: (1) a prorata portion of property taxes will appear on your closing statement, (2) your annual mortgage statement might have some if the mortgage company is collecting from you and paying the taxes or (3) the amount of property taxes that you pay directly. Note as far as closing costs are concerned, except for points, property taxes and prorata interest, other closing costs are NOT deductible until you sell your home.

Add the above to your other itemized deductions like state and local income taxes and do a computation as if you were going to file your taxes. You can then adjust your income tax withholding so that not too much is withheld. Remember to adjust your income tax withholding again in early 2007 when you have a full year of mortgage interest deductions and property tax.

Good luck!

Answer 2

Without knowing your entire financial picture, it's impossible to say.

The mortgage interest and property taxes are deductible if you itemize deductions. If you buy late in the year, you might not have enough there to make itemizing worthwhile for the year of purchase.

For a rough estimate, figure 15% of the difference between your total itemized deductions and the standard deduction. The standard deduction depends upon your filing status. The basic standard deduction amounts for 2006 are:

* Head of household — $7,550
* Married taxpayers filing jointly and qualifying widow(er)s — $10,300
* Married taxpayers filing separately — $5,150
* Single — $5,150

Given what interest rates are right now, if you're married filing jointly and your mortgage interest and property taxes are your only itemized deductions you might not get any extra tax savings at all. The interest on a $130k loan for a full year will be around $8,200 at 6.5%. You'd need at least $2,100 in property taxes just to equal the standard deduction in that case. If you're single with those same numbers the tax savings would be between about $770 and $1440 depending upon your tax bracket.

Answer 3

Not much more than other years. To be honest your interest deduction for owning this house for a partial year is likely less than the standard deduction.

Even when you pay the full interest amount for owning for a full year, your income tax savings will not be significantly more than when you used the standard deduction.

The mortgage deduction really only helps those who own $170k+ on their house (which is either early in the mortgage for a 200k home or later for a more expensive home), as the standard deduction is substantial.

The mortgage interest deduction is one feature of the income tax code that really isn't as much a benefit to working class people as the media paints it out to be, unfortunately.

Answer 4

2756.21$ more