What are some other good tax shelters besides 401k and college for kids.?

Question

I'm a self employed property owner. The property that I'm renting is gonna net me about $300,000. This is after everything, and puts me in the 33% federal tax bracket. What are some other tax shelters I can use? If I were to pay an additional $100k toward the principal of my mortgage, could I use that as a deduction?

Answer 1

No, no, no! Interest is deductible. Principle is not. Pay the minimum payment.

Call your bank/broker and ask about Keogh plans and Simplified Employee Pension plans. It sounds like Keogh (which is a pension plan for self employed people) is what you need, but you should have someone look at the details of your situation.