What Tax Benefits You Are and Aren’t Entitled To

I hate paying taxes, and you should too. But no matter how much we detest it, no matter how many times we (the others) rally on the streets, or take matters to the court of law, paying taxes will always be part of our lives. Our cries for a break haven’t gone unnoticed though – true we can’t completely eradicate the system, since the funds the Internal Revenue Service gathers from sources of income is needed for the government projects, programs, financing nuclear weapons (depending on where you come from) and whatever they pool your hard-earned cash into. However, paying more than what you have to is completely out of the question, there are tax benefits given to people having complied with the “criteria” as set by the IRS.

Homeowners get plenty of them, easing the burden of the financial expenses placed on their shoulders. One of the many tax benefits that you can enjoy is tied with the interest placed on the mortgage loan. No, it doesn’t mean you’re exempted from paying the interest on the loan, but it does mean that the interest paid can be included in your tax presentation, which would then be followed by corresponding deductions. Take note though, that there is a “limit” for the amounts that are deductible. In cases where the interest is too high, or passes the “limit” as set by the IRS, it will no longer be deductible, why? Mainly coz the boys at the Internal Revenue Service will think you’re paying capacity is pretty high, given you’re able to put up with such high rates in the first place.

Basically, the majority of loans or lines of credit tied in with your house as collateral are tax deductible. That means the interest on a home equity loan will be given tax relief, as well as a line of credit secured by your house, and second mortgages – knowing this can give you some “actions” (such as availing services linked to your home as security) to capitalize on. But be wary though, the place you and your family is placed on the line here, and occurring too many default payments can equate to you losing it. Going back to the topic, just like the interest on home loans, there is a limit to where it isn’t deductible anymore.

Owning another piece of property that’s being used for rental can also reap some advantages, like insurance, property taxes, and other commercial transactions - you may know all of this already, so let’s dwell into something you might not know, which is all about the cases where there aren’t any deductions. One would be utility fees occurred and the non-interest charges placed on mort loans. There are other scenarios where there will be tax relief given, as well as others will not be given. That, my friend, varies from case to case. So before you start paying for more than you have to, it’s best that you consult a tax adviser – this guy will be able to show you everything that’s needed to know, as well as the “privileges” you are and aren’t entitled to.