Tax saving without having a Mortgage?
by Mortgage Rates on Monday, October 11th, 2010 | 5 Comments
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Municipal bonds are tax exempt. There is no “deduction” for buying them but the interest is tax free.
savings bonds don’t reduce tax. The best tax exemption available is to form an “831b captive” insurance company. You pay “premium” of up to $1,200,000 into your captive, take the tax deduction for the $1,200,000 (legally) and pay no tax on the income from the captive.
Ways to save on taxes:
Put the max into your 410K account at work.
Put the max into your tax-deductible IRA – most people 5K a year.
Forget the mortgage deduction.
Think about it this way.
You give a company 10,000 a year in interest
You only get back 2,500
^^ Not a good investment – don’t you think?
Do you have a brokerage account?
Look at local MUNIS from your state.
Municipal Bonds. note: they pay nothing.
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A savings bond does not lower your tax. A savings bond is a way of saving money without paying tax on the interest immediately. In very limited circumstances, if you use all of the money from the bond for education, you might not have to pay tax on the interest ever. In most cases, you have to pay tax on the interest eventually, usually when you redeem the bond. In all cases, you still have to pay full tax on all your other income.
the only bonds that would be tax savings are investing in municipal bonds where the interest earned is not taxable
other bonds you might be able to get would have no tax advantage