I’m 49 yrs old and need tax deductions. My home is paid off and worth $150,000. I have no revolving debts and a $60,000/yr. income.
Congratulations! The best way to take advantage of your home equity is by putting to good use all the extra money that you have in your monthly budget by virtue of no longer being in debt! Owning your home outright is powerful.
Now that you’ve done the hard work, don’t be tempted to treat the home as a piggy bank. Remember every deduction involves spending money. You pay mortgage interest and get a deduction. Whoo hoo! Great! Except you pay $1 in interest for every 15 cents in tax savings (assuming your taxable income for couple is under $78k) Who “needs” that kind of tax benefit?
So make use of the paid off mortgage by saving more for retirement, contribute to a vacation fund, beef up your emergency fund, and enjoy the feeling of being deb free!
You can also make donations to charities and receive a deduction. Why give the money to the bank, when perhaps you can give it to a program you are wanting to support.
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