Home Ownership is Still the Best Path to a Lower Tax Bill Or Larger Refund

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Real estate prices have famously fallen over the past few years, but what has not decreased in value are the breaks that the US tax code bestows upon home owners.
The largest expense that most of us incur each month is the cost of our respective place of residence, so that expense is easily the most valuable to be able to deduct each year.
The concept is pretty simple; home owners can deduct the majority of their house payment, while renters cannot deduct any of their rent.
You have to pay for somewhere to live, so why not have that payment effectively reduce your tax bill? Mortgage interest and real estate taxes compose the majority of a monthly house payment, especially in the first few years of a loan, due to how mortgages are amortized.
A 150,000 dollar home loan at six percent interest can easily generate a 10,000-15,000 dollar tax deduction each year, depending on how expensive real estate taxes are in your area.
This is important on another level as well, this large deduction that home owners can take, will also allow them to itemize their deductions instead of using the standard deduction-enabling the use of medical, dental, charitable, and unreimbursed job related expenses to be deducted as well.
The most effective tax deductions result from expenditures that are necessary in your everyday life, and can concurrently improve your financial situation in the short term and long term.
(Real estate expenses and IRA contribution are great examples).
When you take in to consideration where home prices and interest rates are right now with the tax incentives that go with purchasing real estate, why try to perfectly time the market? If any of you are on the preverbal home buying fence, my advice is to jump in, with both feet.
A decision to buy real estate will not only help you next tax season, but also for years to come.
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