How much of a tax refund will i get

how much of a tax refund will i get

Answers

Best Answer: You don't get money back for buying a home, aside from the one-time FTHB credit. Most closing costs are used to increase your basis. Points can be added to the mortgage interest in the year of purchase or amortized over their lifetime. At any rate, this is only an itemized deduction that reduces your taxable income, not a return of those funds to you.

While you can deduct mortgage interest and property taxes, with your numbers there's a very good chance that you won't have enough in deductions to make itemizing worthwhile. It's a virtual certainty that you won't have more than $11,400 in interest and property taxes for 2009. For 2010 your interest will be around $4,900 (assuming a typical 5% mortgage) and with $1,455 in property taxes you still fall over $5,000 short of enough to make itemizing worthwhile.

If you have enough in charitable donations,

employee business expenses, medical expenses, etc. to bring your itemized deductions over the $11,400 Standard Deduction you'd get some benefit. For sake of argument, if your total itemized deductions are $12,400 it would reduce your taxable income by $1,000 more than the Standard Deduction would. If you're in a 15% tax bracket, that would save you $150 in taxes.

If your Realtor told you that you'd be getting thousands back in tax benefits, he or she lied to you. Realtors give out some of the WORST tax advice on the planet. I've heard them tell folks buying a modest $100k home that their tax savings "could" run as much as $2,000 a year. That would only be the case if they earned over $350,000 a year AND already itemized deductions. (And at that income level, many deductions go away so even then it's false hope that the Realtor is "selling" his client.)

Source: answers.yahoo.com

Category: Taxes

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