The short answer to this question is: Probably Not. There are many reasons to buy a home but tax savings should not be one of them (at least for most of us).
We all know that we can write off mortgage interest when preparing our tax return but how much we can write off and how much of a reduction in taxes can be a bit more complicated to figure out.
Let's use the example of $10,000 in mortgage interest paid and you are in the 25% tax bracket. This means that only 25% of the $10,000 in mortgage interest paid will reduce your taxable income. $2500! That's it! You're going to pay $10,000 to not pay $2500...
The above example is only a reason to not purchase a home solely for the tax "benefit". If you have a growing family, substantial rent increases or other reasons to purchase a home all these things should be considered together when making your final decision.
Remember, always consult a tax professional when making large purchases that may affect your tax return.
We all know that we can write off mortgage interest when preparing our tax return but how much we can write off and how much of a reduction in taxes can be a bit more complicated to figure out.
Let's use the example of $10,000 in mortgage interest paid and you are in the 25% tax bracket. This means that only 25% of the $10,000 in mortgage interest paid will reduce your taxable income. $2500! That's it! You're going to pay $10,000 to not pay $2500...
The above example is only a reason to not purchase a home solely for the tax "benefit". If you have a growing family, substantial rent increases or other reasons to purchase a home all these things should be considered together when making your final decision.
Remember, always consult a tax professional when making large purchases that may affect your tax return.
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