Fremont Home Buying Tip: Buy A Fremont Ca Home, Get Tax Savings 

Homeownership is the American Dream and Uncle Sam and your state government want to help you achieve that dream.  How?  Through a couple of the best tax breaks available:  the mortgage tax deduction and the property tax deduction.

Mortgage Interest

After you close escrow, move into your Fremont home, and  finish unpacking your boxes, you may think you're experiencing all of the benefits homeownership has to offer.  However, in April you'll find there's a significant financial benefit coming when you file your federal and state income taxes.

How does it work?  The Internal Revenue Service allows you to deduct the interest from your home loan and home equity loan as an itemized deduction on Schedule A of the 1040 long form.  States with income tax also allow you to deduct mortgage interest on your state tax return.

There are some limits:  you can deduct interest only on loan amounts up to $1 million and your home must be the collateral used to secure the loan.

Property Taxes

No one likes to pay property taxes, but again you can deduct state and local property taxes on your home from your federal return in the year they were paid.  If you bought a home in Fremont California for the 2006 median price of $556,640, your property taxes would be $5,570 for the year and are fully deductible.

Return On Investment

Let's say you bought a home in Fremont California for the overall 2006 median price of
$556, 640 with 20% down.  Assuming you had interest the first year of $29,900 (6.75% interest rate) and property taxes of $5,570, your first year federal tax deduction would be $35,470.  

If you fall in the 25% tax bracket, your Federal tax savings for that year would be $8,870.   In addition, depending on your tax bracket, you could save as much as $2,690 on your California income taxes.  Your friendly government will pay you as much as $969 per month to own a home!

We'd like to note that every situation is unique and you should consult with a tax advisor to understand yours.

There is a lot of free information available to you about buying, selling or investing in Fremont real estate. For complete information about the Fremont Ca real estate market including current Fremont homes for sale, property values and more please visit the most complete website dedicated to everything Fremont real estate related.

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