IRS Tax Relief Tips
Many people are looking more and more at how to reduce their tax burden as their income stream increases over the years. There are several IRS tax relief strategies one can take to get maximum tax relief benefits. Below are some tips and suggestions on how to limit tax liability and regain some of that income that keeps getting redirected to taxes.
- Purchase a home instead of rent or lease an apartment or home. The interest paid on the mortgage is tax deductible. Sometimes it’s actually more beneficial to purchase a home or condo instead of rent when the tax deductions are taken into account.
- Purchase your car or luxury vacation with a home equity loan instead of a bank loan. Again, the interest from a home equity loan is tax deductible, providing an advantage to funding automobile purchases or luxury items.
- Pay your January mortgage bill in late December. This way the interest on your mortgage payment for December will be included in your current years tax deductions instead of rolling into the next years tax deductions.
- Purchase Property for Investment. Most wealthy individuals already know that investment property provides the landlord some of the most advantageous tax benefits around. Interest on the investment property loan, maintenance costs, property management costs, travel costs to the property, insurance costs, and repair costs are all tax deductible. In addition, the property can be depreciated over a set amount of time, providing even more tax benefits weighing against the income received from tenants.
- Start a home business and keep track of all expenses. Self employment income has excellent tax benefits, including home office and travel deductions. Keep a log of all travel related to your business and deduct those expenses at years end.
- Max out your contribution to your explorers 401K and/or your IRA. Funding these retirements accounts reduces your overall tax burden by lowering your total earnings by the amount contributed to these plans. As an added bonus, the money invested in these accounts grows tax free.
Above are just a few examples of how one can achieve some IRA tax relief. Look for more tax benefits for investment property owners in the article Investment Property Tax Deductions.