First time home buyer with tax questions!?

I know it%26#039;s a huge %26quot;all up in the air%26quot; question where no one will really know unless they saw my numbers. Although, I wanted to know how much of the mortgage interest you actually get back. How much of a difference will it make on my return?

I%26#039;m horrible at taxes, and tax refunds....it%26#039;s really a different language to me.

Also, I was told by someone that you can claim energy star/energy efficient home improvements as a deduction. I thought you could only do that when you sell the house....am I wrong?

Also, this Earned Income Tax Credit....

Do they base that on your actual earnings? Or is it on your adjusted income?

Thanks in advance for all of your answers....

First time home buyer with tax questions!?

The mortgage interest that you pay goes on a schedule A. Added to this interest are other items such as real and personal property taxes, also sales tax (you can use the safe harbor method and is easier to figure then to add up all of purchases), Medical bills (including prescriptions, dentists, eye doctors and mileage to and from the doctors), medical insurance, charitable contributions, as well as any employee business expenses that you might have that are unreimbursed. If all of these add up to more than your standard deduction then you will save money using them. The amount of money that you save is not a set amount but how much taxes you save based on your itemized deductions verse standard deduction.

There is also a residential energy credit that you might qualify for based on the energy efficiency of you house. Things that can qualify are certain windows, doors, roofs, insulation, and also some furnaces and air conditioners. This is figured on form 5695 and is limited to $500 credit but is different based on what qualifies you for a credit.

The earned income tax credit is based on your adjusted income, or your actual earned income whichever creates a smaller credit.

First time home buyer with tax questions!?

visit library they have good books on this stuff. or visit IRS.gov - they got good info.

understand %26#039;mortgage interest%26#039; works this way . You give ur hard earned money to some one so u can save paying the IRS.

i prefer to keep my money and pay. i come out better.

the house mortgage fallacy continues.

First time home buyer with tax questions!?

I am a disabled veteran and don%26#039;t pay income taxes. But I remember this much and I aced Accounting in college. To claim mortgage interest and other deductions you must fill out the %26quot;long form%26quot; edition of the 1040. Here are a couple of financial tips for you overall. Mortgage interest is %26quot;front loaded%26quot;. Get someone with Accounting experience to print you out a %26quot;mortgage amortization schedule%26quot; and you will see that if your principal and interest (P %26amp; I) cost say $1000/monthly. Using that figure your very first mortgage payment about $50.00 goes to the principal and the rest to the interest. On a 30 year mortgage it takes over 22 1/2 years before half the monies you pay go to principal, and half to interest. From the first payment through the 270th more of your money goes to interest than principal. If your lender did not preclude it try to set it up so that you pay your mortgage bi-weekly (every 2 weeks) as that will give you 13 monthly payments per year and that effectively reduces your mortgage from 30 years to less than 23 years. Pay %26quot;additional principal payments%26quot; whenever you have extra money. Ask someone who knows finance and computers as they can tell you what software to get to get yourself an amortization schedule. FYI- a $200,000 mortgage actually costs you about $650,000 if you have a traditional 30 year mortgage and don%26#039;t make any additional principal payments. Good luck. The rule of thumb (before the idiotic lenders started giving mortgages to everyone) used to be your mortgage could not cost more then 28-31% of your income.