A lot of people brag about their “great tax write-off.” We snicker. Don’t get us wrong, if you are buying something because you need it and get a tax deduction on the side, that’s great. But when your decision to buy something is swayed because you’ll get the tax advantage, well, that’s laughable…and sad. Why? You’re spending a dollar to save a quarter.

One of the most common and largest tax write-offs for the average person or family is associated with the home mortgage. The interest is usually tax deductable. No one seems to do the math, though. We know of too many people who won’t pay off their house early because of the tax deduction, or just as bad, buy too much house because of the tax deduction. And because of not crunching the numbers, they will pay the bank a dollar just to save a quarter on taxes. They will lose seventy-five cents of every dollar they pay in interest! So why would anyone justify keeping a mortgage any longer than necessary or buying more house than they need just because they can write off the interest? The answer is, we’ve been duped.

As if paying a dollar to save a quarter isn’t bad enough, if you have a mortgage you’ll have to pay quite a bit in interest (and/or other deductions) before you even exceed the “standard” tax deduction to make it worth the bother. Did you get this? You have a choice every year to either take the standard tax deduction or itemize your deductions (basically just adding up mortgage interest, property tax, giving to charities, etc.). You can take the standard deduction even if you have no mortgage or any other deductions but if you itemize you’ll have to exceed this amount before it does any good. Unless your mortgage interest and other deductions exceed the standard deduction, you get nothing for all the pain. Why would anyone want to pay that much in interest when you already get a free standard deduction? The answer is, we’ve been duped again. Don’t even get us started on houses and the fact that they’re rarely a good investment when you have a mortgage… (we’re not against houses, just against buying them foolishly).

Tax write-offs are just an incentive to buy (and quite often using credit). They were not created with you in mind, but were created with “others getting your money” in mind. We don’t just fall for this in buying houses either. We may buy all kinds of stuff for our businesses too (vehicles, furniture, electronics, appliances, tools, etc.), thinking that the tax savings make it a good bargain. On the surface it does look like a bargain. But buying a bargain you don’t really need isn’t saving you anything.

Don’t let your tax write-offs be the reason you buy anything. Get stuff you need, yes, and take the tax deduction if it’s there. But if you can, avoid even being eligible for tax write offs. If you simply don’t want to take this advice and “have to” have a tax deduction, here’s the best one – give to charity! You’ll get the same tax deduction. You’ll still spend a dollar to save a quarter. But this time the dollar goes for something of a worthy cause, not to increase the bank’s profit. And you get paid back a quarter in tax savings for being so nice. Now there is a good incentive.