how much tax refund you get when you bought a house?

Answer 1

Sorry, but you don't automatically qualify for a tax refund when you buy a house.

What you do get is the possibility that when you itemize your taxes, rather than take the standard deduction, your taxable income will be lower. Mortgage loan interest (the bank will send a form to you every year - this isn't the same as total loan payments), some property taxes, and some of the expenses related to the closing can be claimed on Schedule "A".

Check out Publication 530 on the IRS website (IRS.gov). It's got tax tips for new home owners.

Answer 2

Buying a home doesn't guarantee any refund at all. Whether or not you get a refund is based solely upon having too much tax paid in when compared to your tax liability.

Owning a home CAN attract tax savings but even that is not guaranteed. You can deduct mortgage interest and property taxes along with any points paid in the year of purchase. Beyond that, it won't do much for you on a year-in year-out basis.

Even though mortgage interest and property taxes are deductible, you still need to have enough to exceed your standard deduction to get any benefit. Some married couples in low-cost areas are shocked to discover that their home purchase gives them no tax benefit at all since their standard deduction is $10,300 and they pay quite a bit less than that in interest due to the current low mortgage interest rates.

The big payoff on tax day is potentially when you sell your home. If you live in it for 2 of the 5 years immediately prior to the sale date, you can exclude gain on sale up to $250,000 if single or $500,000 if married filing jointly. Of course that assumes that you make a profit on the sale. In some parts of the country property values have flattened out or even declined in the past year or so. Anyone there is now discovering that there may not be any gain at all when they sell -- or worse yet, a loss since that isn't deductible.

Answer 3

The decrease in taxes is usually not nearly as much as people think it will be, and can be nothing at all.

Having a mortgage often gives you enough eligible deductions to itemize. If you're married filing a joint return, both under age 65, your standard deduction is $10,300 this year. If your eligible "itemized deductions" add up to more than that, then you itemize instead of taking the standard. Your tax savings is the amount that your itemized deductions are above your standard, times your tax bracket, which for most people is 15 or 25%.

So for a married couple filing a joint return, if their total itemized deductions add up to $10,300 or less, there is no savings. If their deductions totalled for example $13,000, their tax savings in the 15% or 25% bracket would be $405 or $675.

Answer 4

Well there are the points you pay for your mortgage and the interest for that year that you pay on the mortgage and the property taxes that you paid for that calendar year on your primary residence at least. You should bounce this against the standard deduction, because if the standard deduction is high enough for your situation, the refund won't be much. They already figure that into your withholdings in a standard paycheck or in quarterly filings for business owners.

Answer 5

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