Posted by: coastcontact | October 5, 2016

You Don’t Have to Be Rich to Obtain Tax Breaks

Do you own a home and have a mortgage? All the interest you paid on that mortgage this year is an itemizable deduction on next year’s income tax report you will file in 2017. That one single item is usually the primary basis for having a total of deductions that will exceed the standard deduction. Without that interest deduction your total itemizable list will probably fall short of the amount needed to itemize all your expenses.

Are you going to say to yourself “I feel an obligation to pay more to help support the government.” Or are you going to itemize your deductions to lower your income tax liability? I am guessing you will itemize and pay the lower amount of taxes.

If you buy municipal bonds in your state issued by any municipality or your state government the interest you earn on those bonds is not subject to any federal income tax. Will you list the interest as coming from municipal bonds or will you list the interest as not coming from those sources and pay the taxes that would apply? I am guessing you will claim their tax free status.

The maximum rate of tax on qualified dividends is 0% on any amount that otherwise would be taxed at a 10% or 15% rate. Will you also not take advantage of that benefit?

Why is it inappropriate for Donald Trump to take all the deductions available to him?

Of course $916 Million is a big right-off. Did Donald Trump do something illegal? No. I have never heard anyone say they have a moral responsibility to pay more taxes than they are legally required to pay.

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