17 Ridiculous Tax Loopholes

YACHT DEDUCTION

It isn’t really the yacht deduction, but that’s what this loophole in the mortgage interest deduction can give you, as long as you borrow the money to buy it. According to IRS Publication 936, the home mortgage interest deduction can be used on any “qualified home.” A qualified home can be a mobile home, house trailer or boat, as long as it has sleeping, cooking and toilet facilities.

To take advantage of this tax savings, you can live in your regular house and deduct the interest on that “second house” yacht down at the marina as well. The only catch is that you are allowed a maximum of $1,000,000 in total mortgage balances.

 

15-DAYS FREE RENTAL INCOME

The IRS allows you to rent out your home for up to 15 days without having to pay any taxes. Although that might not sound like much for your average house, certain houses, like those near the Masters golf course during the tournament, can earn a big chunk of change in those 15 days. Bottom line: No matter how much rent you charge, you’ll owe no taxes.

 

HSA PAYS MEDICAL BILLS PAST, PRESENT AND FUTURE

Normally to deduct medical expenses on your taxes, they have to exceed 10 percent of your income in a single year. But, thanks to the Health Savings Account, you can effectively deduct your medical expenses from the first dollar, whether they happened this year, years past or even in the future as long as you have a “high-deductible” health insurance plan.

An HSA works like an IRA: You get a tax deduction for saving and investing money now to pay for future medical expenses. But thanks to this loophole, you don’t have to do it that way.

Funds in your HSA can be used to pay for any medical expenses that occur after you open the account, regardless of when the contributions were made. You can even save up for years, theoretically reimbursing yourself for medical expenses that occurred decades ago.