A much larger percentage of Americans will pay income taxes for 2022 than did so for 2020.
One thing you should always look out for â regardless of the type of loan youâre applying for â is loan origination fees. Many lenders charge origination fees for new loans to help cover costs on their end. However, what these fees are called and the amount of these fees can vary quite a bit […]
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What Is Tax Planning? Tax planning is the process of reviewing your financial information from the prior year before filing your tax returns. This is done by closely looking at what tax benefits you can take advantage of, planning big purchases strategically, reducing taxable income, and more. Tax planning is the practice of analyzing and
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You may already know they can help you come tax time, but what are tax deductions and how are they different from tax credits? Tax deductions lower your taxable income. Tax credits provide you with an overall discount on your tax bill. Letâs break down exactly what that means so you can optimize your tax
The post What Are Tax Deductions and Credits? 20 Ways To Save on Taxes appeared first on MintLife Blog.
Owning a home can offer some unique financial benefits, including appreciation and a potentially lower monthly cost compared to renting. But you might be wondering: Does buying a house help with taxes? The short answer is yes, there are numerous â¦ Continue reading â
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My friend Amy recently wrote with an interesting dilemma. “Should I pay off my mortgage early?” she wonders.
Amy has a high-paying job and has managed to save enough that she could be completely debt-free if she wanted to. And she kind of wants to! But is this the best choice? She’s aware that this is a nice problem to have â but it’s still a bit of a muddle. She’d like some guidance.
Here’s an abridged version of her email:
I’m wondering if you have any advice for me related to paying off a mortgage vs. keeping it for tax purposes.
Hereâs the basic rundown: I have 22 years and $103,000 left on a 30-year fixed-rate mortgage at 3.95%. My monthly payment is $668 per month. I will pay about $48000 in interest this year. I pay both my taxes and insurance out of pocket annually.
The past two years, I’ve made close to a quarter of a million dollars each year, and this year I will likely exceed that amount. This is a wonderful place to be. With no other debt, I’m contemplating whether I should completely pay off my mortgage in one swoop come November when I get my bonus.
I have advice coming from both sides. My accountant warns me against it, as I would have no other write-offs to offset my high income. However the freedom of being DEBT FREE sounds amazing, even if it comes with a high tax bill.
I would love your advice (or the advice of your readers, if this offers an opportunity to share with them).
My stock answer to this question — which I get a lot — has always been: This is a no-lose situation. Deciding whether you should pay off your house is a case where either option is awesome.
Mathematically (and financially), the best choice is almost always to carry the mortgage. However, many people receive a huge psychological boost from not having a mortgage. In other words, this is one of those situations where the smart financial decision and the smart psychological decision aren’t necessarily the same.
Although Amy is asking specifically about the tax implications, let’s start by examining the Big Picture.
The Pros and Cons to Paying Off Your Mortgage
Just so everyone is on the same page, here’s a quick look at the pros and cons to paying off your mortgage. There are advantages and disadvantages to both choices. Are certain advantages more important than others? You make the call.
When it comes to your taxes, knowing the lingo is key to understanding them. What’s the difference between a tax credit, tax deduction, and an adjustment? We’re here to help you find out!Although the terms are used interchangeably, tax credits, deductions, and adjustments are three different things.
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Giving money to a good cause can lift our spirits, but can it also lift our tax burden? What about if weâre not donating to a charity, but to a church? Church, synagogue and mosque donations are tax-deductible, as long as â¦ Continue reading â
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