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TAX BENEFITS FOR HOME OWNERS
Your home may well be the best tax shelter you could possibly own. If you are considering the purchase of a home, or just want to refresh your knowledge, it will be helpful to know the tax-related benefits of home ownership. Be sure to check with your tax professional to confirm if you qualify for specific deductions.
Mortgage Interest Closing Costs Property Taxes Selling Your Home
In most cases, homeowners can deduct interest payments on mortgage debts. For example, suppose you bought your home with a $200,000 mortgage at a 7 1/2 percent interest rate. Your monthly principal and interest would be about $1,400 per month or about $16,800 annually. Of this amount, close to $15,000 would be in interest and almost $2,000 would reduce the principal. With the mortgage interest deduction, you can deduct the $15,000 from your gross income.
Home Equity Loan Interest
As a homeowner, you may deduct interest on any loan that is secured by your residence. The deduction is limited to interest on the amount of debt that does not exceed the equity in your home.
Closing Costs
When purchasing a home, buyers generally.......
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