My Home Gets Me a Bundle back from the IRS and State

Written By: Glenn Michaels

Every year millions of American tax payers must file their federal and state tax return forms by April 15. As I look at my calendar tax filers have two more weeks to file unless they go on extension.

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Over the years my home has been my cash cow to enable my wife and I to get back a bundle of dollars from both the Internal Revenue Service and from the state (New York) where I reside. In fact my employer(s) often have trouble with the way I file the W – 4 form. I dislike giving the government an interest free loan. Therefore I usually file Married 7 and I pay a minimum amount to the Internal Revenue Service and to the state government. Why do I claim married 7, my home is my cash cow where I pay very little to the government and receive a substantial amount of tax refunds due to paying a high amount of real estate taxes and mortgage interest.

Currently, mortgage interest paid, mortgage late charges paid, mortgage insurance premiums paid and real estate taxes paid are tax deductible. The points paid for a purchase of a home is also deductible in the year paid. If you refinanced your mortgage the points paid must be prorated over the life of the new mortgage term.

Long Island has high taxes (as most of New York State) and my mortgage was recently refinanced under the Home Affordable Refinance Program (HARP). My mortgage interest rate dropped to 4.375% from 6.375%. As the new mortgage is mostly interest front end loaded together with the real estate taxes my tax deduction is quite substantial. I did not pay any points to refinance my mortgage as a courtesy to someone in the mortgage business. Normally it would have been at least one point or $3,290.00 in our case.

My real estate taxes on my home for the past year was $8,668.00 which is fully tax deductible. The mortgage interest, late charges, if any, and mortgage insurance, if any was about $16,000.00. The one point, $3,290 over 30 years is $109.67 or rounded to $110.00.

My tax deduction for owning a home for 2013 is $24,778 and we have not even figured in my business use of my home.

If you are self – employed or an employee and use a portion of a home for business you may be able to take a home office deduction. In my case I am an instructor using my home office and home computer and I also receive clients in my home office. Therefore I can deduct a portion of my home under the home office deductions.

This allows me to deduct a portion of my home expenses which increases my tax deduction again.

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Owning a home and working out of the home has its tax advantages. If you have not filed your tax forms yet and own a home remember what you can deduct and cut down your tax liability to the United States Internal Revenue Service and to the state and local municipalities.

About The Author

Glenn Michaels - As an NAMP® staff writer, Glenn Michaels is a mortgage underwriting instructor for Mortgage Underwriter University ( As a BBA & FHA DE Underwriter, Glenn is a Pace University graduate who also graduated from New York University’s School of Mortgage Finance. Glenn has conducted numerous training classes and has worked in the mortgage banking industry for 38 years. If you're interested in becoming a writer for NAMP®, please email us at:


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