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Old 07-29-2014, 03:10 PM
 
2,038 posts, read 1,947,532 times
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Quote:
Originally Posted by Thinking-man View Post
ughh......are you really that ignorant or are you just pretending to be that ignorant?
I'm not donating anything to anyone. i'm 'buying' something with the interest i pay the mortgage company. I'm buying the right to borrow lots of money from them.

As far as 'keep it and deduct it', who said anything about that? or are you just in the business of making things up because you don't want to spend two minutes to read the intent of the thread altogether?

this thread is not about 'tax evasion'. it's about finding ways to 'legally' lower your tax burden after paying off your mortgage. Similar to how the interest from your mortgage can be 'legally' lowering your tax burden, there are perhaps other ways of achieving this without that particular vehicle.....and that's what i'm trying to find out and understand.
Yes it's simple make charitable contributions in the amount of what you were giving to the bank and keep the receipts and you can deduct that same as mortgage interest. Other than that why obsess about taxes?
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Old 07-29-2014, 03:11 PM
 
2,038 posts, read 1,947,532 times
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Quote:
Originally Posted by GLS View Post
No, but I still work one day a month so I have considerable business deductions. These are actually more valuable to me since they reduce my self-employment tax as well as income tax. In addition, my mortgage rate was 4% and in the last few years the interest deduction was not significant.

The point of my original response post was to illustrate that the psychological benefit for ME PERSONALLY of owning a home free & clear was worth the tax trade-off.k:
Exactly! Just be happy you have peace of mind and just pay your taxes without complaint.
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Old 07-30-2014, 02:53 PM
 
Location: SW Florida
9,751 posts, read 7,033,290 times
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Quote:
Originally Posted by Thinking-man View Post
thanks for the response and i'm sorry if my question wasn't clear enough. I understand how mortgages work. I'll be mortgage free in a few months and i'm trying to find ways to take advantage of 'other' ways to reduce my tax burden.
I was thinking buying another rental property....but the mortgage interest of that is offset by the rent collected.....i'm already maxing out 401k/ira/etc, and taking advantage of deducting property taxes, tc.....I can't think of other ways, especially after i stop paying mortgage interest.....


i hope that's more clear.
About four years after we paid off our mortgage, we got a large equity line of credit on that house, we wanted to use the money to build our retirement house. We were both still working, that was our only mortgage, and it took a while to build that house, so we were able to use the equity to pay off the loans on two cars and buy another car with cash, make some repairs on the house and put a new roof on it, and pay a significant amount on the loan every month. The interest rate on the equity loan was prime minus 0.5%, which maintained it around 3% for most of the time we had the loan. We paid off the money we owed on that loan, when we sold that house, ended up with a new house with no mortgage to live in when we retired, and still made a nice profit on the house we sold.

Now we're facing few deductions, so we will see what comes with tax time.
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Old 07-30-2014, 08:52 PM
 
Location: Sierra Nevada Land, CA
8,394 posts, read 9,141,441 times
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Quote:
Originally Posted by Travelassie View Post
About four years after we paid off our mortgage, we got a large equity line of credit on that house, we wanted to use the money to build our retirement house. We were both still working, that was our only mortgage, and it took a while to build that house, so we were able to use the equity to pay off the loans on two cars and buy another car with cash, make some repairs on the house and put a new roof on it, and pay a significant amount on the loan every month. The interest rate on the equity loan was prime minus 0.5%, which maintained it around 3% for most of the time we had the loan. We paid off the money we owed on that loan, when we sold that house, ended up with a new house with no mortgage to live in when we retired, and still made a nice profit on the house we sold.

Now we're facing few deductions, so we will see what comes with tax time.
Be sure to spend a $1000 to save $250 on taxes. The smart thing to do!
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Old 07-31-2014, 10:32 AM
 
Location: SW Florida
9,751 posts, read 7,033,290 times
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Quote:
Originally Posted by Mr5150 View Post
Be sure to spend a $1000 to save $250 on taxes. The smart thing to do!
Perhaps that's your idea of a smart thing to do, but not mine....

Obtaining money to meet one's goals, ( such as a mortgage-free new home to live in following retirement)
or paying off loans for which the interest is NOT tax deductible ( such as car loans), from a source in which the interest IS tax deductible ( home equity loan), now that, I think, put us ahead of the game. If our lives today are any indication, it sure did....

But thank you for the "sage" advice.......
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Old 07-31-2014, 12:58 PM
 
Location: Edina, MN, USA
6,954 posts, read 7,391,767 times
Reputation: 16283
The thought of no debt is so freeing. I remember getting a call from someone pushing one of these consolidation loans "Lump ALL your credit cards into 1 loan!!!!"

I said "I only have 1 credit card" The guy resounded with "You do??!!??!!" I almost laughed he was so shocked by that statement.

Now that my mortgage is paid I feel like painting "All mine" on the front.
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Old 08-01-2014, 06:13 PM
 
852 posts, read 1,818,049 times
Reputation: 617
Looking for a tax deduction; just have some more kids.
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Old 09-04-2014, 08:27 PM
 
Location: In The Pacific
986 posts, read 1,178,690 times
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When our mortgage was paid off, we did nothing! We just let the extra money keep on building in our nest egg! We live in the Philippines and our home is here! Nothing in the U.S. to return to!
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Old 09-05-2014, 02:55 AM
 
6,353 posts, read 5,158,773 times
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Quote:
Originally Posted by Thinking-man View Post
Since the interest paid on mortgages is presumably a big chunk of tax write off, i'm wondering what some of you folks did to offset that 'loss of tax benefits' once your mortgage was paid off!

Aside from IRAs/401k/529 plan, what other methods did you use to lower your tax burden after finishing with the mortgage?

I started a SEP-IRA. Up to $52,000 a year (but not typically more than 20% of gross Schedule C income) is deductible from income subject to tax. That's huge. I have to admit I don't fully understand all the rules for calculating the maximum deduction, but I don't deduct the maximum so that's OK.

(Don't be fooled by the IRS publication that says that 25% is deductible. That's not for self-employment.)
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Old 09-07-2014, 11:46 AM
 
Location: Central IL
15,224 posts, read 8,523,201 times
Reputation: 35622
Quote:
Originally Posted by Mr5150 View Post
I've never understood the logic of throwing away $1000 in order to save $300 in income tax.

Our house is paid for and if needed, we will do a reverse mortgage as a last resort.
Well, hopefully you're not just throwing it away and it's some kind of investment that will get you something down the road, beyond the tax benefit.
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