March 26, 2007

Income Tax Savings

Income Tax Savings

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Because of income tax deductions, the government is basically subsidizing your purchase of a home.� All of the interest and property taxes you pay in a given year can be deducted from your gross income to reduce your taxable income.

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For example, assume your initial loan balance is $150,000 with an interest rate of eight percent. During the first year you would pay $9969.27 in interest.� If your first payment is January 1st, your taxable income would be almost $10,000 less � due to the IRS interest rate deduction.

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Property taxes are deductible, too.� Whatever property taxes you pay in a given year may also be deducted from your gross income, lowering your tax obligation.

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As always, we advise you consult with a tax professional about your tax situation.� If you have a comment or question, please feel free to leave that below.

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