When tax time rolls around, ranks of Americans feel the sting of giving nearly half their paycheck away. Thankfully, the IRS tax code has a few built-in loopholes for workers of every income level.
Click through to read about ridiculous tax loopholes that can help keep money in your wallet
Low-Income Loophole: American Opportunity Tax Credit
People who fall in the lower income bracket can take full advantage of the American opportunity tax credit. Designed for people with adjusted gross incomes of under $80,000 — or $160,000 if you’re married and filing jointly — it gives you a credit of up to $2,500 per eligible student towards the first four years of college education expenses like books, tuition and other necessities.
Middle-Class Loophole: Mortgage Interest Deduction
If you fall firmly in the middle class, look no further than home sweet home to give you a big tax break. By joining the ranks of homeowners, you’re entitled to one big “gimme” from the IRS: Deducting your mortgage interest.
Keep in mind, this homeownership tax break only comes into play if you plan to itemize your deductions rather than taking the standard deduction. Before you file, weigh the options and crunch the numbers to see which route would be more fiscally advantageous for you.
High-Income Loophole: Capital Gains Tax
If you’ve been particularly prosperous, take advantage of the capital gains tax loophole. It’s open to anyone of any income level, but it really helps out the highest of earners — particularly the ones in the bracket netting 25 percent or higher.
This tax rate helps out high earners because the tax on long-term capital gains for most taxpayers is between 15 and 20 percent, whereas the tax rate on a high earner’s regular income can be taxed as high as 39.6 percent. The savings come when you take advantage of the gap.
Click to keep reading about tax loopholes that could save you serious cash.