Getting A Mortgage Tax Deduction

You may assume that filing taxes has to be confusing, but that isn’t the case. With the use of Turbo Tax 2014, you can make the filing process less stressful.

If you have a mortgage, you may be considering utilizing the mortgage tax deduction when handling your taxes.

My Mortgage Docs to be Reviewed by an Expert
My Mortgage Docs to be Reviewed by an Expert (Photo credit: i am real estate photographer)

Many people attempt to lower their taxable income with the use of deductions and credits. In order to do this, you may want to claim your mortgage interest. Some homeowners plan to use the deduction and hope to benefit from it, so they choose not to pay off their mortgage. You’re likely wondering if it makes more sense to benefit from the savings or get rid of your debt altogether.

Many individuals find that they have enough money to pay off their debts and still have some savings for emergencies, but they’re not sure if they should make this move.

If you choose to pay off your mortgage so that you can be debt free, remember that tax credits are different than deductions. A credit will lower your taxable income and a deduction will lower the percentage of tax that you owe. If you don’t have a mortgage, you may pay more in taxes, but it may still be less than what you’d pay in interest if you had a loan. In this case, it doesn’t make sense to keep a mortgage in order to get the tax breaks.

New Tax Relief For Education

New Tax Relief For Education

The Lifetime Learning Credit 2010 gives a tax credit of up to $2,000 dollars for types of higher learning. It differs from the American Opportunity Tax Credit because it can be claimed for part-time students  and even for courses that don’t count towards a degree. This credit has been made available through 2011, 2012, and again this year. Eligible Expenses include Tuition but not room and board, Books, Equipment, and fees that may be required by the University. The Lifetime Earning Credit isn’t eligible with tuition paid fro by a scholarship, employer funds or a grant. Even if multiple students are eligible the Lifetime Learning Credit can only be claimed once a year per household. The tax credit reduces taxes by 20% for non qualified expenses for up to $10,000 dollars for a total of up to $2,000.

A construction project to repair and update th...
A construction project to repair and update the building façade at the Department of Education headquarters in 2002 resulted in the installation of structures at all of the entrances to protect employees and visitors from falling debris. ED redesigned these protective structures to promote the “No Child Left Behind Act”. The structures were temporary and were removed in 2008. Source: U.S. Department of Education, (Photo credit: Wikipedia)

You may claim the credit if you, a dependent or your spouse attends an eligible university or educational institution. even if only one class is taken, the tax credit may be claimed. All accredited colleges and universities are eligible as well as vocational schools as long as their also eligible for the US Department of Education’s Federal Student Aid Programs. Single head of households and qualifying widows earning between $53,000 and $63,000 have been phased out for 2013. If you’re married and filing jointly, the phase amount is $107,000 to $127,000. This amount is up from 2012’s phase out range of $52,000 to $62,000 for qualifying widows and single, head of household and a range of $104,000 to $124,000 for Married couples filing jointly.

Tax Credits For Your Home

2010 Tax Credits For Your Home

For those of you thinking of buying a new home but are not sure about the 2010 tax credits, maybe this will help you. If you are buying a home and your modified gross income is less than $245,000, the house costs less than $800,000, and you’re a first time home buyer, you can receive full credit. If your modified adjusted income is more than $125,000, you will receive a reduced credit. If your MAI is more than $245,000, you will receive no credit. Also, for those of you who are remodeling, you can also receive tax credits for your home.

2010 Guide To Home Buying Tax Credits

Many Families And Indivduals Are Eligible For Tax Credits

WASHINGTON – OCTOBER 13: U.S. President Barack Obama speaks during a Rose Garden event about the American Opportunity Tax Credit (AOTC) October 13, 2010 at the White House in Washington, DC. Obama had a meeting with college students and their families on American Opportunity Tax Credit (AOTC) and he urged the Congress to extend college tax credits. (Image credit: Getty Images via @daylife)

The 2010 tax year offered many deductions and credits for those who chose to itemize their deductions. That is good news for many taxpayer’s but the better news is that there are some new 2011 tax credits that many people may not be aware of, and better still some of these credits can be used even if you do not itemize on your tax return. One credit that some of us might overlook is an energy tax deduction.

The energy credit can be taken up ten percent on a project with a five-hundred dollar cap. It can be used on anything from gas, electric or oil water heaters to energy star windows. check with your tax professional or the IRS for information on energy related deductions and credits.

Other credit that might be overlooked are Education Incentives. One such deduction under this heading would be the American Opportunity Tax Credit. This is a credit of up to $2500.00 of the cost of tuition and related expenses. This also includes the cost of materials. There is also a deduction or credit for the interest paid on a student loan.

There are many credits for families that are worth looking into. Child tax credit as well as Dependant Care Tax credit. Dependant Care Credit allows a taxpayer credit for a percentage of childcare expenses for children under the age of 13 or disabled dependants.

Tax Credits Calculator: What It Can Do?

In this life, there are only a few certainties and one of them are taxes.  Most of us hate paying those taxes but a tax credits calculator can make the process seem less painful.  If a single mother of two young children is struggling to make ends meet, tax credits can greatly help her provide for herself and her children.

However, this is not a replacement for employment.  Those at the lower end of the financial spectrum often see these credits for a short time. This is a way of gauging how much of a refund will be given back to people.  The Urban Institute, a nonpartisan think tank for social policy in Washington, has been instrumental in devising this calculator.

Elaine Maag, a co-director for the calculator at the institute, stated that many people feel it is almost useless to work anymore due to the declining amount of credits.  What was once a glimmer of hope for the poor has become a fleeting dream.  The Tax Credits Calculator also helps shed light on how each individual state rolls out tax credits.

Ms. Maag goes on to state that our hypothetical mother could receive approximately $18,000 in funds from groups such as Temporary Assistance for Needy Families (TANF), the Supplemental Nutrition Assistance Program (SNAP) and a Women, Children and Infants subsidy (WIC).  Once the mother begins working at a minimum wage job, she will earn around $18,000 in wages but the benefits will begin to rapidly decline because she is now “making her own way.”  Using the Tax Credits Calculator will reveal that unlike before, she is not getting back credits as much.