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wizardPC · 02-25-2005, 09:28 PM

The thing about tax writeoffs is that the you don't reduce the amount of taxes by the value of the item (interest in this case), you reduce the amount of your taxable income.

Some people think that having a mortgage to pay is a tax benefit. Let's say that you can pay off your mortgage today, but you don't because you think you are getting a tax break by having the mortgage. Let's say you will pay $10,000 this year in interest and you are in the 25% tax bracket. In this case, you won't pay taxes on that $10,000--saving you....wait for it.....$2500 in taxes this year.

Think about that.

You pay the bank $10,000 to avoid paying the government $2500.....hmmmm.....

02-25-2005, 09:28 PM	#29
wizardPC Raw Wave Join Date: Jun 2000 Location: Nashville Posts: 2,649	The thing about tax writeoffs is that the you don't reduce the amount of taxes by the value of the item (interest in this case), you reduce the amount of your taxable income. Some people think that having a mortgage to pay is a tax benefit. Let's say that you can pay off your mortgage today, but you don't because you think you are getting a tax break by having the mortgage. Let's say you will pay $10,000 this year in interest and you are in the 25% tax bracket. In this case, you won't pay taxes on that $10,000--saving you....wait for it.....$2500 in taxes this year. Think about that. You pay the bank $10,000 to avoid paying the government $2500.....hmmmm..... __________________ Debt as of 1/1/05: $34,354.48 Debt as of July 4, 2007: $0.00 explanation Total spent on wedding so far: $3885.79 Thanks to everyone for your support. I'M DEBT FREE!!