Turn Those Tax Day Blues into Green

15 Apr
April 15, 2009

So you woke up this morning in a cold sweat. Oh man, it’s tax day. If you owe money to the IRS it’s pay day, but you’re not the one getting paid. You’re writing the check. How can you get out of this dreadful situation? Oh, I know, I know……..buy a house. If you are renting right now you are making a mortgage payment. Unfortunately it’s not yours, it’s your landlord’s. And guess what, the landlord is getting all the tax deductions. He should be sending you thank you notes every month.

Meet Ima Homeowner. She bought a new home on January 1, 2008. The sales price was $200,000. She financed the purchase using FHA and rolled her upfront mortgage insurance premium into her loan, which totaled $196,377.50. She had good credit and was able to get a 5% interest rate. During the first year she paid $9,753.08 in interest. In addition her property taxes were $2500. Her total tax deduction is $12,253.08 (interest and property tax) Her tax bracket is 30% so her tax savings for the first year is $3675.92, or $306.33 a month. In addition, discount points, even if they are paid by the seller, are deductible in the first year of ownership. Two (2) points were paid on her loan, or $3927.55. That increases her total deduction to $16,180.63 and at a 30% tax bracket her savings increases to $4854.19 or $404.52 monthly. There’s no magic, no sleight of hand. It’s really that simple to turn your blues to green.

Don’t wait any longer. Now’s the time to free yourself from the burden of rent. Consult with a professional Realtor today. Get off that path to continued debt and on the the road to financial independence. You know you can do it. We’re all pulling for you.

Tags: , ,
4 replies
  1. Amit Kulkarni says:

    Absolutely on the money with this article.

  2. Charlie Carroll says:

    How can we get to all the renters who are qualified to be owners but just don’t know how to go about it?

  3. David Hess says:

    Seeing my interest deduction and charitable giving deduction reduce my taxable income each year, and save me money on taxes, makes me happy to be a homeowner and to support causes I believe in.

  4. Janet McCallon Lange says:

    If only ALL renters knew what a great investment and TAX SHELTER buying a home can be! I’m working with some savvy young Military renters who realize that taking advantage of the new $8000 tax credit, the LOW interest rates and the LOW prices will probably help them take away some significant cash when their 2 or 3-year tour in the Washington DC area is over.

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply