ou can often save money on your taxes by deducting certain expenses from your income before calculating the taxes you owe.

As a home owner, your tax savings are dependent on your tax bracket, corresponding tax rate, and how much you can deduct. To determine your tax savings, use the tax table below to determine what tax bracket you are in today.

1998 Federal income tax brackets


Will your tax rate stay constant?
Unless you expect a major change in your income, use your current income to select a tax bracket. Tax brackets are normally adjusted upward every year by a few percent anyway.

If you anticipate a significant change, up or down in your annual income, you will want to estimate your average income for the time in which you expect to own the home.

What is deductible?
Generally, the interest on your mortgage (including discount points) and your property taxes are deductible.

Should you start itemizing your deductions, you may find that there are other items that you could deduct. These other write-offs include those for charitable gifts, your state taxes, business expenses or high medical expenses.

Your other write-offs will increase the impact of your housing deductions on your tax savings.

For example, if you have $3,000 in write-offs from charitable gifts and $10,000 in housing deductions and the standard deduction is $4,000, your savings will be on $9,000 of your housing expenses.

Already itemize?
If you currently take the standard deduction, you will need to calculate how much real effect these housing deductions will have on your taxes.

For example, if you will be able to deduct $10,000 a year in mortgage interest and property tax write-offs as a homeowner, and the standard deduction is $4,000, you will have tax savings only on $6,000 of it since you would have had a $4,000 deduction even without buying a house.