Are you thinking of buying a house? Investing in real estate is still a popular and relatively safe way to build your nest egg for the future and increase your enjoyment today.

When reaching for the goal of home buying, don't forget to consider how your taxes may be affected by your decision to invest in real estate.

What are some ways? Here are 3 big ones that can affect different homeowners.

Itemized Deductions

Under current tax law, taxpayers can choose one of two ways to take a deduction against their adjusted gross income... lowering the taxable amount on which taxes are figured.

This deduction can either be a standard amount allowed by the IRS for their filing status or an itemized amount in which the taxpayer uses actual costs for a variety of expenses added together. Either method is generally allowable, so you can choose the most advantageous way for your situation.

Many taxpayers file with the "standard" deduction ($12,600 for a couple filing together in 2016) because they simply do not have enough expenses that qualify to itemize. Such itemized expenses include things like state income taxes, charitable donations, non-reimbursed employee expenses, tax preparation fees, and mortgage interest.

Buying a primary home allows you to itemize several costs, including the interest paid on your mortgage, mortgage insurance, and real estate taxes. Adding these expenses to your other deductible items may allow you to increase this deduction and reduce your taxable income.

Home Office

If you have or are thinking of starting a home business, it could help reduce your taxes as well. The home office deduction can be taken as either a standard amount per square foot or as a percentage of the costs of the home. These costs include mortgage interest, insurance, utilities, depreciation, and more.

The home office deduction is a business expense and can lower your profit, which lowers both income tax and self-employment tax.

While you can still use the home office deduction if you rent, ownership may result in more expenses, including insurance and repairs, which can be used to calculate the deduction. It may also allow you to have more space to use for your business.

Even if you're an employee, the additional space may help you to negotiate a work-from-home arrangement with your employer, saving money for both you and them. Your accountant can help you decide if working from home may benefit your overall taxes. 

IRA Withdrawal

Of course, before you begin using your home on your taxes, you need to purchase it. And some tax laws can help with this.

You can tap into both traditional and Roth IRAs when purchasing real estate as a first-time buyer. The IRS defines a "first-time home buyer" as a taxpayer who has not owned a home (or had a financial interest in one) for the last two years. That may include many people who might not consider themselves a "first-time buyer".

If you fit this bill, you can withdraw up to $10,000 per spouse, a total of up to $20,000 for a couple that files jointly, without paying the additional penalty for early withdrawal. You will only pay regular income tax on the amount. If you have a Roth IRA, you can avoid paying any tax if you only withdraw less than the amount you have contributed (up to $10,000).

Buying a home is a big decision, and there are a lot of facets to it. But, by knowing how you can get help with the down payment and lower your taxes after the purchase, you may find that it's a little easier. Why not discuss your potential tax savings with your accounting firm today?