What kind of tax refund can I expect come tax time if I was a 1st time buyer this year in NJ?

Question

I bought my first house this April. I live in NJ. I got my mortgage tax statement yesterday, and I've paid close to $9000 in interest. My closing costs were around $6000. I've heard you are supposed to get a sum close to the amount you paid for your closing costs back come tax time. What kind of refund can I expect, not factoring in job, 401K, etc?

Answer 1

Can't really tell from the info you give, but as an estimate, assuming that you're married and you didn't itemize before, and that nothing else changed much this year:

Your standard deduction for this year would be $10,300. Only the amount of itemized deductions over that save you anything, and they save you the excess amount times your tax bracket.

I'm going to make a lot of assumptions here - substitute in your actual numbers to get an estimate for your situation,

If your real estate taxes paid in 2006 were $3000 and
your state and local taxes paid were $2500 and
you gave $1000 in charitable contributions and
you didn't have other itemized deductions and
you're in a 15% tax bracket

then your total itemized deductions would be $9000 + 3000 + 2500 + 1000, for a total of $15,500 which is $5200 over the std deduction, so you'd save 15% of $5200, or $780, on your taxes.

Whoever told you that the savings usually were about equal to your closing costs was being very optimistic. But your savings might be more or less than my estimate, depending on your deductible expenses and tax bracket. See irs.gov, the instructions for 1040 schedule A, to see other exspenses that might be deductible.

Answer 2

If you live in the home your closing costs most of them are not deduct able. Only if it were investment property.
I dont live in your state but as for the IRS which is equal to us all,I can say part of the closing costs (which would be money for payment of real estate taxes out of escrow ) Taxes and interest are deduct able on schedule A. As for how much return you would get I guess the rest has to do with all your other income, earned and unearned and adjustments and credits
knowing a good tax guy can help when considering these factors
a couple hundred bucks many times can be well spent. the
tax code and it interpretations can change

Answer 3

It will depend on your income, how many dependents you have etc, etc. It's completely impossible, without knowing those, to tell you what your refund will be. Sounds like you'll probably be able to itemize your deductions on a Schedule A. You'll need to gather as much of the following as you can: Mortgage interest, excise tax paid on vehicles you own, property taxes, contributions to charity and/or church (cash and noncash), medical and dental expenses( must equal at least 7.5% of your gross income), and any employee business expenses you incurred that were not reimbursed.

Answer 4

Not enough info provide.

Mortgage interest, points paid at closing, and property taxes are all an itemized deduction along with state income taxes and charitable deductions. Without knowing your total income and deductions, it is impossible to give you an estimate. Most closing costs, are not deductable so whomever told you what you "heard" is mistaken.

You may want to see a professional this year.

Answer 5

Asking about your expected tax return without factoring in a job is like asking how much weight you will lose without factoring diet or exercise. Any answer is an uneducated guess or a flat out lie.

Answer 6

you'll probably have to pay.