Middle Class Tax Shelters Everyone Can Use But Many Don't
Middle Class Tax Shelters That Everyone Can Use But Many Don't
Many people fail to realize that home ownership has many tax advantages that come in the form of deductions. And its better to put money into a home you own than into a rent check where you are never again going to see your money. If you finance a home it can save you money when you file your income tax return the next time.
There are many people who will go for years paying money to a landlord thinking that they can't afford to buy a home of their own. However many people continue to be renters because they are not aware of the options available to them. Do you realize that you can probably come up with a mortgage payment that is close to what you pay in rent. And most people don't know or understand that there are a lot of tax advantages to owning your own home. There are a lot of tax deductions available to a home owner that will never be available to a person paying rent.
Paying a mortgage and taking advantage of the tax deductions available to you as a home owner can result in zero taxes at tax time. And what could be better than that. In the early part of a mortgage loan almost all of what you are paying is going towards the interest you owe on your mortgage. Lets say your mortgage payment is $1000 a month and since in the early part of your mortgage almost 100 percent of your payment is going to interest payments guess what? You can take a deduction of $12.000 so in reality your going to end up owing $12.000 less in taxes. Can you say wow! If you own property your going to have to pay property taxes and guess what. They are 100 percent deductible on your income tax return. Can you see where I'm going with this. There are real financial advantages to owning your own home and paying a mortgage. As a home owner and paying on a mortgage you are going to owe a lot less taxes than the man renting a home.
If you refinance your home to make improvements to your home you will find that you once again have distinct tax advantages. If you refinance your home try to pay off all your credit cards as part of the package. You can reduce your monthly debt and the interest paid on a home loan will be lower than you would pay in interest to the credit card company. Try to keep those credit cards paid off and in time your credit score will improve. Try to limit your credit card debt to only what you can pay off each month. If you do this your credit score will go up. As you can see there are a lot of advantages to being a home owner. Even if you can't buy a home in the usual way there are still ways you can become a home owner.
Consider owner financing where a home owner sells you a home with any payments being applied against the price of the home. Just be sure if you go this route that you have an agreement in writing. If you're a U.S. veteran you may be able to get a home mortgage through a VA loan even if you can't get a regular mortgage loan. Call your local VA office and ask if there is some one available to help you in applying for a VA Home Loan. What ever you do try to figure out a way to become a home owner and mortgage payer because you will have a lot of tax advantages and tax deductions that a person paying rent will not have. Thank you for taking the time to read my hub page and if you have comments or questions please post them now.
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© 2011 Thomas Byers