Tax Benefits

Financing

We all know what is on everyone's minds in March and April...TAXES...here's an example of why you should BUY and not RENT if you can afford to do so! Call me with any questions or to learn more about Home Partners of America, a program that allows you to rent with option to buy for up to 5 years.

Tax Benefits example- (THIS IS JUST AN EXAMPLE, not based on anyone's personal situation)

Vladimir is a single, childless guy who rents a house for $1200 a month. His adjusted gross annual income is $128,000. He has $3500 state income tax withheld from his paychecks during the year and qualifies for no itemized deductions. His federal income tax liability for the year:

Adjusted gross income: $128,000

Standard deduction: single $4400

Personal exemption $2800

Taxable income $120,800

Vladimir's 2008 federal income tax: $32,129. Ouch! That’s a lot of Wii games!

But if Vladimir buys a house with a mortgage payment of $1200 per month, everything changes:

Adjusted gross income $128,000

Itemized deduction for state income taxes: $3500

Itemized deduction for real estate taxes: $1500

Itemized deduction for mortgage interest: $11,400

Personal exemption $2800

=taxable income: $108,800

=Vladimir’s federal income tax: $28,409. He just saved almost $4000 by buying a house instead of paying rent.