The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: tax deductions||Date: 5/30/2003 9:04 AM|
|Author: pmarti||Number: 65587 of 121219|
I am new here so please point me in the right direction. We have paid off our home and I am looking for some ideas on tax deductions. Our children are grown and we do not have a business.
Short answer: Why?
Long answer: Since you're new here you've never had the thrill of reading my harping about what I call taxphobia. I'm not saying this applies to you, but there are plenty of people who get so fixated on reducing taxes that they'll spend $100 to save $20 in taxes. This is not wise planning, and such people are also very easy to scam.
My personal opinion is that taxes should be used to finance necessary government, but Congress, in its infinite wisdom [irony alert], has chosen to use tax law not only to get money but to engineer behavior. The biggies that Congress has chosen to give tax breaks to are home buyers, parents, the charitable, and those saving for retirement.
You've paid off your home. Rather than thinking about losing the mortgage interest deduction, focus on the fact that you no longer make mortgage payments. Remember the time that those payments really pinched your budget, lift a glass, and celebrate the good new days.
You've raised your children. Lift another glass and celebrate the fact that you've raised productive competent adults. It probably never ocurred to you, but there are plenty of parents who can still claim their adult children as dependents. Would you like to join them?
While you're celebrating all your good fortune, remember those who are less fortunate. There's no end of need in the world, and you can get nice tax deductions for charitable contributions given in thanks that you don't need the benefit of them.
Which brings us to retirement planning. I have no idea what your situation is, but my parents couldn't afford to think of their future until they finished thinking about mine. If you don't feel financially secure for your future, that's where you need to concentrate. There's a section on retirement on the Fool homepage that I highly recommend.
My overall suggestion is that you adjust your thinking from trying to reduce your taxes toward celebrating your accomplishments and planning for the future. The taxes will take care of themselves.
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