As previously mentioned in our “Investment” page –
All of the interest portions of your mortgage paid as well as your yearly property taxes you pay during the year can be deducted from your gross income. This also helps to reduce your taxable income thus reducing your overall tax obligation.
Confused? Don’t be – let us assume your initial loan balance on your home is $150,000 and is financed at an interest rate of 8%. During the first year you would pay $9969.27 in interest alone. If your first payment is on January 1st, your taxable income would be nearly $10,000 less (due to the IRS interest rate deduction).
Again, whatever property taxes you pay during the year may also be deducted from your overall gross income again reducing your overall tax obligation.