Is there a calculator that tells you have much you'll be getting back from taxes if you're owning a house as compared to just renting an apt? I know it depends on your salary bracket but I wasn't able to find a place that tells you what tax bracket I'm in and what the difference would be ....
tax savings with owning a home vs renting an apt.
- Thread starter LordSnailz
- Start date
might want to put this up in the CPA tax help thread (sticky above). they might be more helpful. that's a d@mn tough question. they'll prolly say need more info....(salary, $$rent, $$prospective house)....i think that stuff would help.
The basic advantage is that your interest is tax deductible. Given that you're initial payments (early in the mortgage) are virtually all interest, you basically get to deduct your mortgage payment.
It is substantial, but don't think of it as your friend - You're still paying all that interest out each month.
Viper GTS
It is substantial, but don't think of it as your friend - You're still paying all that interest out each month.
Viper GTS
If the interest is tax deductible, does that means the amount I'm pulling in per month after SPP, 401k and taxes will be greater than the figure I have right now? If so I was planning to use that money towards the mortgage payment so we can start making a dent in the principal amount.
I'll post this on CPA's thread as well ...
I'll post this on CPA's thread as well ...
zephyrprime
Diamond Member
- Feb 18, 2001
- 7,512
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ratesIt really depends on how much you make and how much your state tax rates are. But assuming you make an average amount of money, roughly speaking, you're looking at about 30% of your mortgage payments. So at this rate, your mortgage paymet could be 142% of your apartment rent but the end cost to you would be the same as your apartment rent.
However, mortgage payments is usually more than apartment rent and the % of your mortgage that goes to interest diminishes with time. Also, you have to pay property taxes. Also, homeowners insurance is a lot more than renter's insurance. But at least you get home equity when you own a home and you don't have to pay rent forever like you would if you rent for your entire life.
However, mortgage payments is usually more than apartment rent and the % of your mortgage that goes to interest diminishes with time. Also, you have to pay property taxes. Also, homeowners insurance is a lot more than renter's insurance. But at least you get home equity when you own a home and you don't have to pay rent forever like you would if you rent for your entire life.
I'm planning on getting this place with my gf, combined salary would be 140k, mortgage we figure would be around $3500-$4000. Rent right now is about 1100 but they're bumping that up to 1300 soon ... thanks for the link!
CPA
Elite Member
- Nov 19, 2001
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Posted a response in the tax thread.
But Based on this, a 30 year loan would provide about 35K in interest deduction for the first few years (not including a short first year). By your income, you would be in the 35% tax bracket.
One slight problem, is that you are awfully close to the alternative minimum tax threshold due to your high income. This will reduce your effectiveness of itemized deductions.
The income quoted is our combined salary, individual would be us at the 30% tax bracket. Is there a good way to decide who we should deduct the interest from? From what I understand, only one person can get the tax break.
with both names on the title, and both same names on the mortgage, i am not under the impression that only one person can take the deduction.
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