| Owning your home is part of American dream. Your | | | | houses, the only condition is - you have to claim all |
| home may be a house or just a condominium but that | | | | these taxes in the year in which they are paid. |
| does not matter. Almost everybody purchases it with | | | | A lot of people are required to purchase 'points' while |
| a mortgage. This mortgage payment brings a number | | | | securing a loan for their home. These points are useful |
| of tax benefits to make you happier. | | | | for reducing the rate of interest on loan. They will also |
| If you take a mortgage, you need to be careful while | | | | increase the amount paid by the lender. They are |
| preparing your tax return. The first important step is - | | | | simply the fees while processing your loan. |
| go for itemized deductions. If you take the choice of | | | | If you are planning to purchase these points for your |
| standard deduction, you will not be able to deduct | | | | primary residence, you can claim a deduction for their |
| interest on your mortgage and many other expenses | | | | cost in the year of purchase itself. However if you are |
| on your tax return. Standard deduction allows you to | | | | going to purchase a number of houses, the |
| deduct a specific percentage from your gloss income. | | | | expenditure on points is deductible over the period of |
| However you will miss out on all deduction relating to | | | | the loan. If the points are classified as a kind of interest, |
| your home. If you are a first time home-owner, it is | | | | then the total money spent on them is deductible from |
| strongly recommended that you should go for itemized | | | | your gross income. |
| deductions. | | | | The main deduction however is the interest which you |
| Once you make that choice, you are eligible for three | | | | pay while making payment of your mortgage. The |
| deductions -taxes on your property, the cost of points | | | | amount which you paid towards your principal is |
| purchased while taking a mortgage and interest on | | | | obviously not deductible on your tax return but the |
| mortgage. | | | | amount of interest you pay is fully deductible. The |
| As you take a mortgage, it is obvious that you will be | | | | interest is usually high during the initial years of your |
| paying taxes on that real estate. These taxes usually | | | | mortgage and it diminishes over the number of years. |
| charged by the local or state government. Remember, | | | | This amount of interest will reduce your gross income |
| you have to use schedule A to itemize. These taxes | | | | and it may bring down your tax bracket. Naturally you |
| can be straightaway deducted from your gross | | | | will pay lower taxes every year. |
| income so they would lower your tax liability directly. | | | | In addition to fulfilling of your dream of owning your |
| There are no limitations on the amount of taxes you | | | | own home, these deductions will fulfill your another |
| can claim as deduction if it is your own home. | | | | dream - paying less taxes! |
| However, if you are planning to purchase a number of | | | | |