How much of a tax refund will i get for buying a home?
My husband & I bought our first house this past may. I know we qualify for the $8000.00 tax credit but I heard we also get money back for closing costs, interest, etc. We live in northeast PA, the house was $105,000.00 with the closing costs it came out to be $112,000. We put 3.5 % down. Our first mortgate payment was due July 1st & out yearly taxes are $1455.00. Does anyone know if we will get a some money back? If so how much? Thanks.
My husband makes $42,000 a year & I make $32,000.00 We both claim one so we get more in each paycheck but less in the end of the year. We have no kids.
- 1 decade agoFavorite Answer
You don't get money back for buying a home, aside from the one-time FTHB credit. Most closing costs are used to increase your basis. Points can be added to the mortgage interest in the year of purchase or amortized over their lifetime. At any rate, this is only an itemized deduction that reduces your taxable income, not a return of those funds to you.
While you can deduct mortgage interest and property taxes, with your numbers there's a very good chance that you won't have enough in deductions to make itemizing worthwhile. It's a virtual certainty that you won't have more than $11,400 in interest and property taxes for 2009. For 2010 your interest will be around $4,900 (assuming a typical 5% mortgage) and with $1,455 in property taxes you still fall over $5,000 short of enough to make itemizing worthwhile.
If you have enough in charitable donations, employee business expenses, medical expenses, etc. to bring your itemized deductions over the $11,400 Standard Deduction you'd get some benefit. For sake of argument, if your total itemized deductions are $12,400 it would reduce your taxable income by $1,000 more than the Standard Deduction would. If you're in a 15% tax bracket, that would save you $150 in taxes.
If your Realtor told you that you'd be getting thousands back in tax benefits, he or she lied to you. Realtors give out some of the WORST tax advice on the planet. I've heard them tell folks buying a modest $100k home that their tax savings "could" run as much as $2,000 a year. That would only be the case if they earned over $350,000 a year AND already itemized deductions. (And at that income level, many deductions go away so even then it's false hope that the Realtor is "selling" his client.)
- Anonymous4 years ago
sure you are able to spend it on something you like. the belief of the rebate is to enable new assets vendors to spend it on domicile appropriate products, as a potential to stimulate the financial gadget. I have been given my $8,000 rebate in April of this 365 days and we used it to end our basement in July which we are greater effective than happy approximately doing. It of course did no longer cover the comprehensive fee, regardless of if it helped tramendously. If we did no longer get the rebate, there became no way we could have been in a position to do it.
- Ryan MLv 71 decade ago
Yes you will get some back, but "how much" is impossible to know without knowing your COMPLETE tax picture.
- Anonymous1 decade ago
include it when filing your return. your realtor would explain this to you