The
tax deductions you’re eligible to take for mortgage interest and property taxes
greatly increase the financial benefits of home ownership. Here’s how it works.
Assume:
$9,877
= Mortgage interest paid (a loan of $150,000 for 30 years, at 7 percent, using
year-five interest)
$2,700
= Property taxes (at 1.5 percent on $180,000 assessed value)
______
$12,577
= Total deduction
Then,
multiply your total deduction by your tax rate.
For
example, at a 28 percent tax rate: 12,577 x 0.28 = $3,521.56
$3,521.56
= Amount you have lowered your federal income tax (at 28
percent tax rate)
Reprinted from
REALTOR® Magazine (RealtorMag.Realtor.org)
with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2008. All rights reserved.