Now, more than ever, people in all walks of life are looking into the many benefits of home ownership. The tax benefits of owning a home can be enjoyed by those who have a single property, or by those who have both a primary and secondary residence. In basic terms, mortgage interest and property taxes can be deducted from tax calculations for a primary residence. If a second residence is involved, the same advantages apply, but depreciation allowances are made if a third party rents one of the properties. There is not a set tax benefit for homeowners. The amount of money credited depends on a number of different factors. Many of them are actually the same things that affect standard tax returns like filing status, job expenses, and charitable donations.
Using a “Calculator” to Determine the Tax Benefits of Owning a Home
There are computer programs that allow people to figure out what kind of benefits they can expect to receive for owning their homes. A person enters information pertaining to the location of his house, its property value, and when it was purchased. He must also enter the amount of the loan he has taken out on the home, the interest rate of that loan, and the length of the loan term. When all of this, and some other basic tax information, has been entered, the simple click of a button will give an estimate on the tax benefit.
“So, what kinds of benefits can I expect?”
People often expect the benefit to be far greater than the result they get. For example, a married person, living in a $200,000 home in Texas, who has a 30-year loan of $150,000, stands to get a benefit of about $190. This amount will, of course, be higher in some areas and lower in others. However, the average homeowner, after entering his information, should not expect the tax calculator to generate an enormous sum.
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