Tax Freedom Day April 23rd for most

I recently read a “special report” published by the Tax Association boastfully declaring April 23^rd as the official date that most will have earned enough income to pay their share of all necessary federal, state and local taxes. The study shows that due to the expected impacts of the economic stimulus package, this date has been moved up by three days after having moved later each of the last four years.  Well isn’t that profound? 

Who would have thought that the government returning billions of dollars to its rightful owners would shorten the number of days that tax-payers would need to work to contribute? While I don’t want to seem ungrateful to Uncle Sam, I would like to point out that by taking too much from his citizens each year, he has created this need to “stimulate” by giving back. 

So the 23^rd is the day Americans can effectively say they are working to provide for themselves and their families rather than paying for government.  Today, I want to talk about what we can do to move that date even earlier each year. It is a well know fact that one of the main tax advantages we receive is through the benefit of homeownership. 

100% of the interest and property taxes we pay for the roofs over our heads is tax deductible and in many cases, so is any associated mortgage insurance. So the first thing one should do is to make sure they are taking advantage of that benefit. It can return thousands of dollars back to its rightful owners and move their “tax freedom day” up by several days. It is also a key reason that you should consider making your first real estate investment you own home. This is why it makes sense to buy a first home as soon as you can do so in a financially responsible way.

Another way to achieve “freedom” is through real estate investment. Not only can one derive an income stream from owning real estate, the government allows the asset to be depreciated much like any other piece of capital equipment owned in a business. Take advantage of the “loopholes” provided by the government to minimize taxes owed each year and since “a penny saved is a penny earned”, maybe you can shave off a few more weeks of working for the government.