Most Home Buyers Can Reduce Their Withholding Check your withholding after you buy a home. If you're buying a home, check your tax withholding at work after you complete the purchase.
Most home buyers are eligible to reduce the amount of tax withheld from their paychecks.
And that will leave more cash available during the year to make the monthly house payments. First-time home buyers are usually able to reduce their withholding because they'll be eligible to start claiming deductions for mortgage interest and property taxes. Most homeowners who are trading up to a more expensive home also are able to reduce their withholding since they'll usually have more mortgage interest and property taxes to deduct. On the other hand, if you're trading down to a less costly home, you may need to increase your withholding to reflect the smaller amount of mortgage interest and property taxes you'll be able to deduct. To adjust your withholding, just file a new IRS Form W-4 with your employer.