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Deal with Your Debt: The Right Way to Manage Your Bill$ and Pay Off What You Owe by Liz Pulliam Weston

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Myth #4: Homeownership Comes with Great Tax Breaks

It's true that mortgage interest is potentially deductible on your tax return, as are the property taxes you pay. But many people overestimate the extent of those tax breaks and often misunderstand how they work.

Mark is an attorney in Frederick, Maryland, who shared many people's misconceptions about the potential tax benefits of homeownership.

“Homeowners get 100% of their interest payments back on their annual tax returns, right?” he wrote. “If I accumulate principal with each mortgage payment and get all of my interest back when filing my taxes, then it does compare favorably to renting, doesn't it?”

In reality, the amount of your tax break is limited to your tax bracket. If you're in the ...

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