Do you like giving the government interest free loans?
- 137 Replies
I hear so many people who LOVE to get so much money back every year from their tax returns. Um....don't you realize that you are paying in too much during the year, giving the government an interest free loan for the whole year? Wouldn't you rather spend or invest the money yourself during the year? Or are you so bad at saving money yourself that you want the goverment to do it for you? Or you don't know that you can change the amonut withheld?
Yes, I know a lot of you are going to say you have some special situation that you can't help but do it this way. I'm not talking about you. I'm talking about the people who could very easily change the amount they are having withheld from each paycheck.
The same way you deduct one.....you deduct the interest for all the mortgages you have. Lots of people have income property or own more than one home.
Quoting Anonymous:
Quoting Anonymous:
Quoting Anonymous:
A LOT of those big refunds are from EITC. They used to let you get that in advance but changed that. Some are for service members who pay on deployment income and then get that all refunded to them. I am not sure if they can do that differently though-they should be able to....
But not all. We get back between $10,000-$13,000 each year. Some is overpayment, some is having 3 mortgages that we deduct interest from, our rental loses $ each month so we can claim a loss there, 3 kids, etc DH makes about $84,000
How do you deduct 3 mortgages? I am curious.
I really don't care as long as they are putting it to good use like schools, safe roads, police, fire dept. etc. We always overpay because dh is self employed and we have to estimate our taxes each quarter. We also have a lot of itemized deductions we can use so we get a good amount back.
Quoting Wicked.Jester:The same way you deduct one.....you deduct the interest for all the mortgages you have. Lots of people have income property or own more than one home.
Quoting Anonymous:
Quoting Anonymous:
Quoting Anonymous:
A LOT of those big refunds are from EITC. They used to let you get that in advance but changed that. Some are for service members who pay on deployment income and then get that all refunded to them. I am not sure if they can do that differently though-they should be able to....
But not all. We get back between $10,000-$13,000 each year. Some is overpayment, some is having 3 mortgages that we deduct interest from, our rental loses $ each month so we can claim a loss there, 3 kids, etc DH makes about $84,000
How do you deduct 3 mortgages? I am curious.
LOL-yes they do. But there are limitations.
For you to take a home mortgage interest deduction, your debt must be secured by a qualified home. This means your main home or your second home. A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities.
The interest you pay on a mortgage on a home other than your main or second home may be deductible if the proceeds of the loan were used for business, investment, or other deductible purposes. Otherwise, it is considered personal interest and is not deductible.
If you get a new home during the year, you can choose to treat the new home as your second home as of the day you buy it.
If your main home no longer qualifies as your main home, you can choose to treat it as your second home as of the day you stop using it as your main home.
If your second home is sold during the year or becomes your main home, you can choose a new second home as of the day you sell the old one or begin using it as your main home.
And of course there is a really convulouted million dollar cap-that is based on the purchase date of the home and other things.
Ummmm.....yeah thanks for the detail. I owned income property, I have an accountant, I know quite well how it all works. I was giving her a simple explanation because that is all that was necessary.
I can copy and paste tax code too....whoopee doo!
Quoting Anonymous:
Quoting Wicked.Jester:The same way you deduct one.....you deduct the interest for all the mortgages you have. Lots of people have income property or own more than one home.
Quoting Anonymous:
Quoting Anonymous:
Quoting Anonymous:
A LOT of those big refunds are from EITC. They used to let you get that in advance but changed that. Some are for service members who pay on deployment income and then get that all refunded to them. I am not sure if they can do that differently though-they should be able to....
But not all. We get back between $10,000-$13,000 each year. Some is overpayment, some is having 3 mortgages that we deduct interest from, our rental loses $ each month so we can claim a loss there, 3 kids, etc DH makes about $84,000
How do you deduct 3 mortgages? I am curious.
LOL-yes they do. But there are limitations.
For you to take a home mortgage interest deduction, your debt must be secured by a qualified home. This means your main home or your second home. A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities.
The interest you pay on a mortgage on a home other than your main or second home may be deductible if the proceeds of the loan were used for business, investment, or other deductible purposes. Otherwise, it is considered personal interest and is not deductible.
Main home. You can have only one main home at any one time. This is the home where you ordinarily live most of the time.
Second home not rented out. If you have a second home that you do not hold out for rent or resale to others at any time during the year, you can treat it as a qualified home. You do not have to use the home during the year.
Second home rented out. If you have a second home and rent it out part of the year, you also must use it as a home during the year for it to be a qualified home. You must use this home more than 14 days or more than 10% of the number of days during the year that the home is rented at a fair rental, whichever is longer. If you do not use the home long enough, it is considered rental property and not a second home. For information on residential rental property, see Publication 527.
More than one second home. If you have more than one second home, you can treat only one as the qualified second home during any year. However, you can change the home you treat as a second home during the year in the following situations.
If you get a new home during the year, you can choose to treat the new home as your second home as of the day you buy it.
If your main home no longer qualifies as your main home, you can choose to treat it as your second home as of the day you stop using it as your main home.
If your second home is sold during the year or becomes your main home, you can choose a new second home as of the day you sell the old one or begin using it as your main home.
And of course there is a really convulouted million dollar cap-that is based on the purchase date of the home and other things.
We usually get ours with in 50 bucks either way. considering all the overtime my husband pulls a year this is pretty damn close.
well i claim 4 dependants so they don't withold much tax out of my check.
But the more you pay out the more you get back at least that is how it is with low income people. because you get EIC and child tax credit. and for some people getting all that money back at one time, helps a lot. low income people tend to spend the money if they have it on them, rather it be for bills or household items, if you don't have the money then you won't spend it. It is extremely hard for people who are low income to save money. We don't have the extra money to put back.
Now i do have $800 put back for bills this week, i saved my last paycheck and then i put this paycheck with it, but every bit of that will be gone in a couple of days.
Quoting Anonymous:well i claim 4 dependants so they don't withold much tax out of my check.
But the more you pay out the more you get back at least that is how it is with low income people. because you get EIC and child tax credit. and for some people getting all that money back at one time, helps a lot. low income people tend to spend the money if they have it on them, rather it be for bills or household items, if you don't have the money then you won't spend it. It is extremely hard for people who are low income to save money. We don't have the extra money to put back.
Now i do have $800 put back for bills this week, i saved my last paycheck and then i put this paycheck with it, but every bit of that will be gone in a couple of days.
Eitc is NOT a return of the money you over paid-you are NOT getting it back. It wasn't your money.
Quoting Wicked.Jester:Ummmm.....yeah thanks for the detail. I owned income property, I have an accountant, I know quite well how it all works. I was giving her a simple explanation because that is all that was necessary.
I can copy and paste tax code too....whoopee doo!
Quoting Anonymous:
Quoting Wicked.Jester:The same way you deduct one.....you deduct the interest for all the mortgages you have. Lots of people have income property or own more than one home.
Quoting Anonymous:
Quoting Anonymous:
Quoting Anonymous:
A LOT of those big refunds are from EITC. They used to let you get that in advance but changed that. Some are for service members who pay on deployment income and then get that all refunded to them. I am not sure if they can do that differently though-they should be able to....
But not all. We get back between $10,000-$13,000 each year. Some is overpayment, some is having 3 mortgages that we deduct interest from, our rental loses $ each month so we can claim a loss there, 3 kids, etc DH makes about $84,000
How do you deduct 3 mortgages? I am curious.
LOL-yes they do. But there are limitations.
For you to take a home mortgage interest deduction, your debt must be secured by a qualified home. This means your main home or your second home. A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities.
The interest you pay on a mortgage on a home other than your main or second home may be deductible if the proceeds of the loan were used for business, investment, or other deductible purposes. Otherwise, it is considered personal interest and is not deductible.
Main home. You can have only one main home at any one time. This is the home where you ordinarily live most of the time.
Second home not rented out. If you have a second home that you do not hold out for rent or resale to others at any time during the year, you can treat it as a qualified home. You do not have to use the home during the year.
Second home rented out. If you have a second home and rent it out part of the year, you also must use it as a home during the year for it to be a qualified home. You must use this home more than 14 days or more than 10% of the number of days during the year that the home is rented at a fair rental, whichever is longer. If you do not use the home long enough, it is considered rental property and not a second home. For information on residential rental property, see Publication 527.
More than one second home. If you have more than one second home, you can treat only one as the qualified second home during any year. However, you can change the home you treat as a second home during the year in the following situations.
If you get a new home during the year, you can choose to treat the new home as your second home as of the day you buy it.
If your main home no longer qualifies as your main home, you can choose to treat it as your second home as of the day you stop using it as your main home.
If your second home is sold during the year or becomes your main home, you can choose a new second home as of the day you sell the old one or begin using it as your main home.
And of course there is a really convulouted million dollar cap-that is based on the purchase date of the home and other things.
The simple explanation on mortage interest deductability isn't you can deduct it. It's you can deduct if for TWO primary residences-after that-check the tax code. And I say that because my family once owned 4 homes-in order to deduct the interest my parents second mortgaged the principal residences-it was the only way to do it.
***headdesk***
Ok....as if CM is now tax counseling 101......you miss the point entirely that its all not needed, and you aren't giving tax advice.
You are way too involved in giving this explanation....yeesh.
Quoting Anonymous:
Quoting Wicked.Jester:Ummmm.....yeah thanks for the detail. I owned income property, I have an accountant, I know quite well how it all works. I was giving her a simple explanation because that is all that was necessary.
I can copy and paste tax code too....whoopee doo!
Quoting Anonymous:
The simple explanation on mortage interest deductability isn't you can deduct it. It's you can deduct if for TWO primary residences-after that-check the tax code. And I say that because my family once owned 4 homes-in order to deduct the interest my parents second mortgaged the principal residences-it was the only way to do it.
leaving baby alone while i do laundry?