just bought my first home do i get any taxe breaks?

Question

just wondering what taxe breaks i can get i'VE HAD PEOPLE TELL ME I'LL GET A EXTRA 5000 DOLLARS BACK if i dont how much will i get back on a 78500 house

Answer 1

If you have a mortgage you get a deduction for the mortgage interest paid. You also get a deduction for property taxes paid. These are only if you itemized your deductions.

With current interest rates, it's quite possible to not get any deduction at all on a $78,500 mortgage since the total interest and property taxes may be less than your standard deduction especially if you are married filing a joint return.

At any rate, there's no way you'd be getting $5k back on a mortgage of anything less than $250,000 and possibly a lot more than that since the value of the interest deduction is only the amount that it exceeds your standard deduction.

Answer 2

An extra $5000? They're dreaming. If you had a million dollar house with a big mortgage, maybe.

You can deduct real estate taxes and mortgage interest. To do that you have to itemize, which means you have to have more in allowable itemized deductions than the standard deduction. The amount you'll save on taxes would be the amount your itemized deductions are higher than the standard, times your tax bracket. That's more likely to be a few hundred dollars, if anything.