When it comes to constants in life

Let’s take a look at three key ways

1. Mortgage interest. This is the one of the most important advantages to home ownership! Generally, if you itemize deductions on Schedule A of your federal income tax return, you can deduct the qualified residence interest that you pay on certain home mortgages taken on your principal residence. In the very early years of a loan, this savings is significant, as most of your monthly payment is interest, rather than principal. Consider as well, if you are in a 28% federal tax bracket, this can have the effect of lowering your borrowing costs by almost a third,depending on which state you live in.

 
For example:
For example: Jill is single, with no children and rents an apartment for $1200 per month. In this scenario, on her federal return she can only take her standard deduction. Now, if Jill was a homeowner, with a monthly mortgage payment of $1200, her tax liability would be lowered and she would receive a form 1098 from her mortgage company detailing how much of her annual mortgage payments went towards interest. Let’s say she paid $11,400 in interest, and also paid $1500 in real estate taxes. That would mean she would get her mortgage interest and real estate taxes deducted!

 
In addition,
In addition, there is a "Home Equity Loan" exception that allows home owners to tap into their home equity and gives them the ability to do what is called "debt-shifting." Take that same scenario and let’s just say Jill from above was also sitting on $10,000 in credit card debt. If she was renting she would not have any tax advantages to paying off that debt. However, if Jill was a homeowner and had taken out a home equity loan to pay off that debt, she would have the ability to write off all of the interest from her home equity loan! As with so many things in life though – there is a catch! The loan must be secured with your house as collateral – so failure to make payments could wind up in foreclosure.
home ownership can help you save on your income taxes! – it’s been said that there are two you can count on: Death and Taxes! When it comes to keeping more of every dollar you make in today’s economy, you may have something else you can count on: Big Savings from the IRS!

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