ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Tax Breaks For Home Owners

Updated on May 23, 2013

There are three levels of taxes that you are responsible for paying; federal, state and local. Federal and state taxes are based on your income. Local taxes are based on your property, and other things. If you own a home, you will have to pay property taxes to your city, town or village. What taxes you pay and what tax breaks you may be eligible for will be different from city to city, so you'll have to do your research to see what may be available to you.

On the state and federal level, you are paying taxes on your income. If you make $100,000 a year, you will have to pay a certain amount of money to your federal and state governments. A tax break comes in the form of a deductible or a credit. A credit is a fixed amount of money that is taken from your taxable earnings. As an example, if you qualify for a $500 tax credit then you only have to pay taxes on $95,000 of your income. A deductible is an amount that you can deduct from your total. For example, if you spend $10,000 on a home improvement and it is deductible, then you only have to pay taxes on $90,000 of your income.

The state governments and the federal government will attempt to provide deductibles for living expenses. Children, home ownership, car ownership, medical insurance, etc. In this way, they try to ensure that they are only taxing your disposable income, meaning the income that you have freedom to use in whatever way you wish. The key to paying your taxes will be to discover what expenses were needed for the upkeep of your life, and which weren't. For example, if you buy a new computer for work, you will most likely be able to write it off, meaning that the cost of your computer can be deducted from your taxable earnings.

The biggest tax break that home owners qualify for is a deductible on the interest you pay on your mortgage. When you buy a home, you usually can't pay for it outright. You put a certain amount of money down, anywhere between 10% and 40% of the price of your home, and borrow the remainder from the bank. The bank will charge you a certain percentage of your loan for borrowing from them, which is how loaners make money. This is called the interest. Usually you pay the interest along with the principal (the amount you borrowed) however, if you take out a 30-year mortgage, the bank often front loads the interest payments so that you pay the interest before paying back the principal. The federal government offers a tax break to home owners for the first 7 years in the form of a deductible on your interest payments. If you pay the bank $2,000 a month, and $1,500 goes to your interest, over the course of 12 months you will have payed $18,000 in interest. All $18,000 will be deductible. So if you earn $100,000, you will only have to pay taxes on $82,000.

The best way to discover other deductibles that you may be eligible for is to consult a tax professional. Tax companies such as H&R Block, make a business out of finding deductibles for their clients. The more deductibles, the less income is determined to be taxable by the government. You can also try to do the research on your own, by looking up tax forms or checking government websites to determine what tax breaks are in effect.


Submit a Comment

No comments yet.


This website uses cookies

As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

Show Details
HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
LoginThis is necessary to sign in to the HubPages Service.
Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
AkismetThis is used to detect comment spam. (Privacy Policy)
HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
MavenThis supports the Maven widget and search functionality. (Privacy Policy)
Google AdSenseThis is an ad network. (Privacy Policy)
Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
Index ExchangeThis is an ad network. (Privacy Policy)
SovrnThis is an ad network. (Privacy Policy)
Facebook AdsThis is an ad network. (Privacy Policy)
Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
AppNexusThis is an ad network. (Privacy Policy)
OpenxThis is an ad network. (Privacy Policy)
Rubicon ProjectThis is an ad network. (Privacy Policy)
TripleLiftThis is an ad network. (Privacy Policy)
Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)