It's tax time, and everyone's scurrying to find deductions on
their returns. If you have loans outstanding, the interest you
be tax-deductible -- but it might not. How can you tell?
In the following video, Dan Caplinger, The Motley Fool's
director of investment planning, goes through the various types
of debt and whether you can write off interest. Dan notes that
mortgage debt is almost always deductible as an itemized
deduction, with amounts up to $1 million. That's a big benefit
for mortgage lenders
Bank of America
, as it encourages borrowing that might not otherwise happen. Dan
also points out that home equity loans are often deductible,
although subject to a smaller $100,000 limit in many cases. Dan
turns to investment-related interest, noting that it's deductible
to the extent that it produces taxable investment income.
iShares National AMT-Free Muni ETF
or other tax-exempt investments, however, doesn't allow you a
deduction. Student loan debt is deductible for some people below
applicable income limits, and the advantage it has is that you
don't have to itemize to take a deduction if you qualify.
Meanwhile, personal loans like car loans and credit cards don't
qualify for deductions, leaving automakers
at a disadvantage to banks and homebuilders because of the lack
of an equal tax break.
Don't make mistakes with your taxes in 2014
Get the deductions you deserve and cut your tax bill. In our
special report "
How You Can Fight Back Against Higher Taxes
How You Can Fight Back Against Higher Taxes," The Motley Fool's
tax experts run through what to watch out for in doing your tax
planning this year. With its concrete advice on how to cut
taxes for decades to come, you won't want to miss out.
Click here to get your copy today -- it's absolutely free.
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