How much is an average refund on taxes the first year your purchase a home?
- Bostonian In MOLv 71 decade agoFavorite Answer
There is no meaningful average. Any refund depends upon your tax liability and how much was paid in during the year.
You may qualify to deduct mortgage interest and property taxes if the total itemized deductions exceed your standard deduction amount for your filing status. Frequently you'll get no benefit in the first year since you only have a partial years worth of deductible interest and taxes.
If you're married and bought a $100,000 home you may never see any tax benefit at all. If you're single and bought a $500,000 home you may see some benefit even in the first year and quite a bit more in subsequent years.
It all depends upon the numbers so we'd have to know your entire financial and tax situation to crunch any meaningful numbers for you.
- taxreffLv 71 decade ago
The answers above are all good.
Looking at it from a different angle, many first-time first-year homebuyers are disappointed when their tax savings is less than expected. That is especially true if few points were paid at closing, and the purchase was late in the year. Those factors cause deductible home mortgage interest and real estate taxes to be lower.
Additionally, many home purchasers mistakenly think all their closing costs are deductible. They are not, and its a rare tax season when I don't meet someone who is shocked to learn that.
- JudyLv 71 decade ago
Hard to say, but probably hundreds of dollars of additional refund due to the house if you bought it fairly early in the year. If you bought it late in the year, it might or might not help your taxes at all for that year, but probably will for future years. It depends on how much mortgage interest and real estate tax you paid that year.
Your tax benefit for itemizing is roughly the total of all of your itemized deductions including mortgage interest and real estate taxes, minus your standard deduction,.and that number times your tax bracket. To calculate the actual benefit you have to subtract the itemized deduction amount, since you'd get that anyway if you didn't itemize, and don't get it if you do itemize.
As an example, say you are married filing a joint return, and have $18,000 in itemized deductions total including your mortgage interest and real estate taxes, and are in a 15% tax bracket which would mean your gross income was around $85K or less for the year. Your tax savings from having the house so being able to itemize would be (18,000 - 10700) * .15, or $1095.
- staatsLv 44 years ago
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- Anonymous1 decade ago
too many variables depends on how many mortgage paymenst you made the first year 1? 11? 6? also depends on your income and other things you can itemize