Hi,
My husband is a physician in Houston and we just bought our first home. I recently read in an article somewhere that 20% the individuals in the high tax paying brackets can get a tax break on their first home. Any one knows anything about this?

Thanks!

Zip Code: 77094

Here is a link to the IRS form that has information about this tax break:

http://www.irs.gov/pub/irs-pdf/f8396.pdf.

This looks to be a pretty good deal. The IRS gives you a tax credit based on the mortgage interest you pay. Remember, a tax credit is a dollar-for-dollar reduction in your tax liability.

You then need to reduce your mortgage interest deduction by the amount of the credit you are claiming, and then calculate your deduction based on the remaining interest.

Let's say you pay $15k of mortgage interest, and qualify for the 120% MCC credit. Let's also assume you're in the 25% tax bracket.

If you claim a mortgage interest deduction of $15k, you'll save $3,750 in federal taxes. If you claim the $3k MCC credit instead, and then deduct the remaining $12k of mortgage interest, you'll save $6k in taxes.

Hope this helps.

Zip Code: 01801