Property Tax vs Tax Deductions?

Georgina Natal: The property taxes are paid to your local area, maybe city, county or school district. Congress wants to encourage home ownership, so allows you to deduct those taxes from your federal tax return. And no you don't break even on it - your tax savings on the federal return is much less than the amount of property tax you pay and deduct. If you are getting taxed around 30% total of your paycheck, you are probably in a 15% tax bracket - if you are, and pay $1000 in property tax you might save $150 on your federal income tax. No, you'd never come out ahead by being able to deduct the tax....Show more

Vita Moodie: Oh, this is in California by the way.

An Trebil: It's true that you can deduct most property taxes from your federal income tax, and also the interest paid on your mortgage. But your tax refund wouldn't necessarily equal the amount of the taxes and mortgage payments. The deductions lower your total income that is used to determine the ! income tax. The deductions are not a rebate of money paid. The deduction for taxes and for interest on a mortgage is designed to encourage home ownership. The property taxes themselves go to your local goverment(s) for their operation....Show more

Porfirio Cahall: You get to deduct the amount of interest you pay on your mortgage when you do your taxes. So yes, by owning a home and paying interest on a mortgage, you will pay less income taxes than you do now. However, you will have to pay property taxes on that house! Whether you end up ahead or not totally depends on what state you live in, how much your mortgage is and what interest rate you pay, and what, if any, other deductions and/or tax credits you have....Show more

Danica Timperman: As investments circulate, your very own place of residing isn't all that warm a deal traditionally. we've had a pair of growth sessions in recent cases that have skewed the numbers those days yet long term it nonetheless isn't! such very plenty. you will do extra advantageous traditionall! y interior the inventory marketplace, appeared at in basic terms as an investment vehicle. The tax injury that maximum taxpayers see is minimum from paying for a house.

Evelin Turlich: Like I said, I'm assuming my taxes are usually 30% of my income. The home is in California. And the interest rate of the 400,000$ home is about 5.25%.Is there an easy way to calculate all that?

Dorris Homola: Property tax goes to your county (or city sometimes) and is related to the value of your property and the services you allegedly receive from the county (or city).The tax deduction is based on the interest you pay to finance the house. If you, say, inherit the house - no tax deduction, but you still pay property tax.The tax deduction usually outweighs they property tax, although that depends on the value of the house, property tax rate, your income and your income tax rate....Show more