Solved: I bought a house this year, yet I still owe the government a lot of money. Why?
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I bought a house this year, yet I still owe the government a lot of money. Why?

 
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I bought a house this year, yet I still owe the government a lot of money. Why?

Those two things have absolutely nothing to do with on another. You owe taxes because the tax calculated on your income is more than the tax that was withheld from your income.

As for buying a house, depending on when in the year that you bought the house, it may very well not reduce your tax owed at all.
You can deduct mortgage interest, points, and real estate property tax paid at closing. You report those expenses along with other mortgage interest/property taxes paid in the year at
Federal Taxes (or Personal if using Home and Business)
Deductions And Credits
choose I'll choose what I work on, if asked OR Jump to Full List
My Home

All other costs paid at closing, including transfer taxes, "stamps", escrow fees, etc., are NOT deductible from current income, instead you add them to the cost basis of your home and you will get the benefit when you sell.

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Highlighted
Alumni

I bought a house this year, yet I still owe the government a lot of money. Why?

Those two things have absolutely nothing to do with on another. You owe taxes because the tax calculated on your income is more than the tax that was withheld from your income.

As for buying a house, depending on when in the year that you bought the house, it may very well not reduce your tax owed at all.
You can deduct mortgage interest, points, and real estate property tax paid at closing. You report those expenses along with other mortgage interest/property taxes paid in the year at
Federal Taxes (or Personal if using Home and Business)
Deductions And Credits
choose I'll choose what I work on, if asked OR Jump to Full List
My Home

All other costs paid at closing, including transfer taxes, "stamps", escrow fees, etc., are NOT deductible from current income, instead you add them to the cost basis of your home and you will get the benefit when you sell.

View solution in original post

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