Dave Ramsey: ‘There’s No Tax Write-Off for a HELOC’ When Used for Everyday Spending

Core Insights - The article highlights the misconception that all mortgage debt provides valuable tax benefits, which is often perpetuated by financial advisors [1][4] - A specific case is presented where a financial advisor incorrectly recommended a $50,000 home equity line of credit (HELOC) for tax write-offs that no longer exist due to changes in tax law [2][5] - The narrative emphasizes the importance of questioning financial advice, especially when it involves taking on debt for perceived benefits [4] Tax Law Changes - The 2017 Tax Cuts and Jobs Act eliminated deductions for home equity debt unless used for substantial home improvements [5] - The article points out that using a HELOC for everyday expenses or investments does not provide any tax benefits [2][5] Financial Advisor Accountability - The financial advisor in the case either misunderstood current tax laws or prioritized personal gain over the client's best interests [3][4] - The couple now faces unnecessary interest payments on the borrowed amount, which was based on a false understanding of tax advantages [3][4] Cost of Misguided Advice - The article illustrates that paying interest to generate tax deductions is often not financially sensible, as demonstrated by the couple's situation [4][5] - The couple is paying 8-10% interest on consumer spending, which is a significant financial burden [4]