income • $63,000 (taxable income) x 20% tax bracket = $12,600 taxes • $80,000 - $12,600 taxes = $67,400 n $67,400 net income per year • $67,400 / 12 = $5,616.67 p $5,616.67 per month net income As you can tell from the two scenarios, the 2nd scenario allows you to deduct interest and taxes which effectively lowers the amount you would pay in income taxes which thus effectively increases the amount of your take-home pay from $5,533.33 to $5,616,67. This results in an additional monthly take-home of $83.34 that can now be used towards your mortgage payments. Not only are mortgage payments cheaper right now than renting, purchasing a property can give you even extra income to use towards making those lower payments. You also get the added benefit of being a homeowner and having equity buildup in a property that just renting property does not give you.
SOME POTENTI TENTIAL HOMEOWNER TAX BREAKS: REAKS:
• The Mortgage Interest Deduction. This is one of the most beneficial tax breaks that homebuyers can take advantage of, whether they are first-time buyers or otherwise. The IRS allows you to deduct from your taxable income the interest you pay your lender. Home mortgage interest is one of the largest deductions for those who itemize. Lenders will report your mortgage interest on a 1098 form sent out annually. The Mortgage Interest Deduction (MID) is valid for mortgage debt up to $750,000 for single filers or married couples filing jointly or mortgage
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