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Slide 1: ==== ==== Pay Zero Taxes Like The Wealthy Do http://tinyurl.com/beat-irs ==== ==== Unfortunately, the hopes of renters are dashed: there isn't a federal rent tax deduction. The good news? The reason there isn't a federal rent tax deduction is that there isn't one because it would be redundant! If the owner of an apartment complex has borrowed money to buy it, the standard interest tax deduction normally applies. And since apartment owners are competing with one another for tenants, that tax saving gets passed right along to apartment dwellers. So you don't see the money melting off your taxes owed, and coming back to you as a check from the IRS. But it's still yours, in effect; the only difference is that you're not the one doing the paperwork. More good news? Even though there isn't a federal rent tax deduction, there are plenty of other ways you can save money on taxes thanks to rent. There are state rent tax deductions, but they vary from one state to another. There are also different terms for different deductions: some are capped, some are not, some apply directly to income, and some reduce taxes directly according to a formula. Although state income taxes are generally lower than federal income taxes (so this isn't as good as a federal rent tax deduction), it's still something. You can get a federal rent tax deduction, if you are renting to rent to someone else. For example: let's say you rent an apartment for $800 a month, and rent it out to someone else for $1000 a month. Your income from this is $1000 per month, but you can deduct $800 per month and only pay $200 per month (which is good news: without the deduction, you'd probably lose money). Security deposits are tax free, unless they're forfeited. That's actually great news for renters! Think of it from a landlord's perspective: if they're in the top tax bracket and take a three-year deposit up front, they're actually going to owe a month's rent worth of tax liability - for money they can't touch! Even if you're not a homeowner and don't get any federal rent tax deduction, there's still hope! A good online tax preparation company can find plenty of tax deductions for you, even if you can't get a federal rent tax deduction, there are lots of tax deductions you can get. You might get state tax deductions, or deductions aimed at commuters. Missing a federal rent tax deduction isn't the end of the world by any means. Tax preparation is complex, but there's no reason to worry about the tax rules that aren't there the ones that exist are enough to keep anyone busy. Your rent might be a burden, but the hidden rent deduction still helps you out, even if it never shows up on your 1040. Byrne Hobart is a New Yorker with widely, perhaps even bizarrely varied interests. He has studied
Slide 2: economics and tax law, and is aware that the lack of a federal rent tax deduction shouldn't deter anyone. Article Source: http://EzineArticles.com/?expert=Byrne_Hobart ==== ==== Pay Zero Taxes Like The Wealthy Do http://tinyurl.com/beat-irs ==== ====