With the April 15 tax-filing deadline having already come and gone, many of our Escondido readers have probably taken their last comprehensive look at their finances for the year. Everyone knows that filing taxes each year can be a grueling process, but the reality is that this time of year also offers individuals and families an excellent opportunity to assess the current state of their overall financial health - and perhaps predict the impact of certain debt obligations going forward and whether or not filing for bankruptcy may be in play.
For instances, a recent article noted that some types of debt actually lower the amount of taxes that need to be paid on a yearly basis. Student loan debt is perhaps the most obvious type of debt in this mold, and it is definitely a type of debt that millions more Americans become familiar with every year. Once someone begins to repay student loans, the interest paid on those loans can be deducted on taxes - up to $2,500 per year, and as long as certain income requirements are met.
The other debt that can help during tax season is a mortgage. Deducting the amount of interest paid on a mortgage is perhaps the most well-known type of tax deduction, and one that millions of Americans are able to take advantage of each year.
There numerous connections between debt and taxes that Escondido residents need to consider when they are assessing their financial situation. Finances can then been coordinated to take maximum advantage of these interrelationships. However, for some people the end-result when they assess their debts, income and savings is that they need to find a debt solution. For those facing the hardest of times financially, filing for bankruptcy may be the best way to rectify their finances, so that their tax and debt obligations can have a healthier balance going forward.
Source: Fox Business, "How Debt Can Actually Lower Your Taxes," Christine DiGangi, April 14, 2014