Can you believe it’s June already? If you’re like me, time seems to fly right on by. Did you know that some analyst believe that by May, all the money you’ve made for the year is enough to cover your taxes? Crazy, huh? To think five months of our income doesn’t even come directly to us. Now, depending on your current tax situation, this may not be completely true for you. But there is an important lesson to be learned here.
We can all use a break from paying excessive taxes, whether you got a refund this year or not. In this blog, I’m going to share with you how buying a home this year can help you keep some of that money in your pocket.
Tax-Refunders…it’s all about tax diversification
A tax refund means one thing: you overpaid the government. Throughout the year, you gave them your money to use without them paying you a dime in interest. So, instead of setting aside your money for the IRS to hold on to, invest that money into a home!
Once you’ve maxed out places to save on taxes, consider what it would take to get your qualified. If you’re a first-time homebuyer, you may qualify for a great rate and a stellar program.
There are lots of options out there. By pre-qualifying, you’ll be able to see exactly what’s in the cards for you…then the fun begins!
Owning a home at tax time means you get deductions. Once you maximize your other deduction areas, having a home can help you get more money! Plus, since you’re making payments on your home, these deductions help you keep money in your pocket.
Already own a home?
We’ve got something for you, too. Have you checked into refinancing lately? Doing a refinance can get you a better rate, while you still take advantage of the deductions that exist.
Tax-Owers…let’s get some tax breaks!
If you paid taxes this year, I’m sure you’ve invested some time into researching ways to maximize your deductions. Well, if you don’t currently own a home, this may be your winning approach.
It’s true, buying a house can help you minimize the amount of taxes you owe. The first thing that comes to mind is deductions, but that’s not all.
Yes, deductions can absolutely help, but so can maximizing your contributions in other areas. One of the first places to look: your 401k or retirement plan.
Did you know that the government allows you to borrow money from your retirement accounts to put a down payment on a home? It’s true!
To take advantage of this awesome benefit, start by increasing your contributions to your retirement account. This will allow you to put the money aside without paying taxes on it. (Consult with your financial advisor to make sure that your account is set up to receive payments that have not been taxed yet.) Then, start pre-qualifying! Find out what you can afford. Use this information to plan out how much money you need to save.
When the time comes, take the appropriate amount out of your account and use it to make a down payment. To avoid paying taxes on the distribution, make sure you have a plan to replace the money in a timely fashion with additional contributions or another option.