Understanding The Mortgage Interest Tax Deduction
The One (and Only) Benefit of High Mortgage Rates!
As mortgage rates remain high, many homeowners feel the pinch of larger monthly payments. But there’s a silver lining that too few fully appreciate: the potential tax savings from the mortgage interest deduction. When purchasing a home, one usually starts with preparing a budget to determine a maximum mortgage payment.
In my prior blog, Master Your Housing Budget, I discuss starting with determining your take-home pay. For most, buying a home will reduce your tax burden, giving you an added revenue boost for your household P&L. Knowing your annual tax savings can be the key to unlocking confidence in purchasing a home. For some, it will lead to an increased payment goal, while others will have more comfort knowing their annual savings or IRA contributions can be met.
What is the Mortage Interest Tax Deduction?
"How much will my tax refund be?"
Learn the calculation that we use to help determine what your tax refund would be!
The Mortgage Tax Deduction Formula
Did you know the IRS pays you to buy a home and take on a mortgage? Well, not really, but it essentially works that way, given that our tax code allows homeowners to write off mortgage interest and property taxes against their top-line income! In this video, I use a real-life example to illustrate the power of the mortgage interest tax deduction and, more importantly, show you how to validate what your tax savings would be if you bought a home!
If your refund is sizeable, you may not want to wait until tax time to get the money, so check out my simple trick to getting the money back sooner!
A real life example!
This video provides a step-by-step guide to validating your income tax savings should you buy a home.