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deductions, such as charitable contributions, are the ones that the government phases out.

The idea of limiting itemized deductions brings us to the very important question of whether or not to pay off your mortgage. Truly, being able to deduct the interest you pay on your mortgage is a very appealing concept that many homeowners take advantage of. How- ever, this deduction is one of the ones subject to the IRS’s phaseout restrictions. Many times, people will continue to pay on their mort- gage, with the misunderstanding that the interest is fully deductible. They aren’t aware that the government restricts the amount you can deduct once your income reaches a certain level. For that reason, there are people who are needlessly paying mortgage interest, when they could be paying off their homes and using the money they would have been using to pay interest to invest.

Take a look at what your AGI was on last year’s tax forms. Was it more than the $128,950 threshold? Are you anticipating that this year’s income will be the same, if not more than last year’s? If you answered yes to these questions, see if you have been deducting your mortgage interest on your taxes. If you have been, then you know that the amount you are deducting is also subject to being reduced because of your elevated income level. However, if your income falls below the threshold amount mark, then you will be able to continue to utilize the mortgage interest deduction to its fullest extent.

There are people who continue to take the standard deduction when itemizing would be the best option. Are you one of them? When preparing this year’s taxes, check to see if you would be better off to itemize rather than to take the standard deduction. After all, it’s your money; wouldn’t you rather keep it instead of letting the gov- ernment have it?


Another strategy to consider if you own your own business and have children is to employ them. By having your children on your payroll, you pass the company’s earnings down to them, thus ensuring that their income will be taxed at the lowest possible rate, the newly imposed rate of 10 percent. You may even find that your children make so little

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