I will definitely need more money and bigger take home pay throughout the year as a first time homeowner, but will I have a big tax bill next year? Are there tax credits/deductions related to owning a home?
Posted in Renting & Real Estate
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I will definitely need more money and bigger take home pay throughout the year as a first time homeowner, but will I have a big tax bill next year? Are there tax credits/deductions related to owning a home?
Posted in Renting & Real Estate
Your homeownership shouldn’t enter into the decision. Just claim what you are entitled to on the W-4.
The instructions for the Form W-4 walk you through those calculations when figuring out your allowances.
Just go step-by-step through each instruction and you’ll figure it out:
Mainly mortgage interest and property taxes.
Do not change your W-4.
WHEN you buy the house, you will start paying interest and property taxes–these are deductible–but they won’t lower your tax until the total is more than your standard deduction. WAIT until you’ll be living in the house a full year before you adjust the allowances on the W-4.
Frankly, it sounds like you can’t afford the house yet.
There might be deductions for owning a home – real estate taxes and mortgate interest can be deducted, but you only get any benefit if your itemized deductions are more than your standard deduction. Usually the first year, if it’s just a partial year of home ownership, you don’t save anything on taxes.
Don’t mess with your W-4.