Home     Forum     401k     401k Rollovers     Crypto Forum
    Register   Login   Members   Search   FAQs     Recent Posts    



Should I adjust withholding for new home

Reply to topic
Money Talk > Taxes

Author Thread
thenewguy1
New Poster


Cash: $ 0.45

Posts: 2
Joined: 24 Jan 2017

Should I adjust withholding for new home  Reply with quote  

According to my loan officer- I would save approximately $350.00 in taxes monthly on a home with my mortgage rate/calculations he did. I think its sound- about $1800 for Principle,interest, taxes, PMI, etc.

That said, I would like to adjust my withholding so that I dont get a huge refund at the end of the year. My question is this- as principle starts to go up, and interest goes down, do I need to re-adjust my withholding each year to match that?

My buddy (who isnt a financial advisor) said that when buying a home you adjust withholdings and then leave it as is for the life of your loan. Is this true?

My fear is that I will withhold 300-400 dollars in taxes each month, It will be right at first but then three years down the road find out I owe a ton at the end of the tax season. Thanks.
Post Tue Jan 24, 2017 5:25 pm
 View user's profile Send private message
oldguy
Senior Member


Cash: $ 751.85

Posts: 3656
Joined: 21 May 2006
Location: arizona
 Reply with quote  

quote:
According to my loan officer- I would save approximately $350.00 in taxes monthly on a home with my mortgage rate/calculations he did


Your loan officer may be over-estimating. Say that you have a $300,000 loan @ 4%, your interest cost is $12,000/yr. But if you are a married couple, you get a standard deduction of $12,600/yr for free. So your mortgage deduction would be worth zero.

But if you have a bunch of deductions - say state income tax, property tax, charity - that add up to $9000, you add the $12,000 to $9000, ie, $21,000. So you would deduct $21,000 from your income way better than using the $12,600 standard deduction. And it doesn't change all that much over the first 10 or more years.

As for owing a ton at year-end - what's wrong with that? It doesn't affect your tax bill, the total is the same whether you over-withhold all year or under-withhold.
Personally I make sure that I never get a refund, I always want to owe on April 15.

I've read that the average refund is about $3000 - and that people are happier when it is even bigger?? My money stays in a taxable SP500 Index that has an average longterm return of 11%/yr - so I leave my money there all year and until April 15 of the next year.
Post Tue Jan 24, 2017 10:16 pm
 View user's profile Send private message
thenewguy1
New Poster


Cash: $ 0.45

Posts: 2
Joined: 24 Jan 2017

 Reply with quote  

quote:
Originally posted by oldguy
quote:
According to my loan officer- I would save approximately $350.00 in taxes monthly on a home with my mortgage rate/calculations he did


Your loan officer may be over-estimating. Say that you have a $300,000 loan @ 4%, your interest cost is $12,000/yr. But if you are a married couple, you get a standard deduction of $12,600/yr for free. So your mortgage deduction would be worth zero.

But if you have a bunch of deductions - say state income tax, property tax, charity - that add up to $9000, you add the $12,000 to $9000, ie, $21,000. So you would deduct $21,000 from your income way better than using the $12,600 standard deduction. And it doesn't change all that much over the first 10 or more years.

As for owing a ton at year-end - what's wrong with that? It doesn't affect your tax bill, the total is the same whether you over-withhold all year or under-withhold.
Personally I make sure that I never get a refund, I always want to owe on April 15.

I've read that the average refund is about $3000 - and that people are happier when it is even bigger?? My money stays in a taxable SP500 Index that has an average longterm return of 11%/yr - so I leave my money there all year and until April 15 of the next year.


Thanks for that.. so it doesnt change much over the years?

I do itemize and recall getting a good 2-3k above the standard deduction last year.
Post Wed Jan 25, 2017 12:22 am
 View user's profile Send private message
avanimehta05
First Time Poster


Cash: $ 0.20

Posts: 1
Joined: 13 Nov 2017

need escort in Delhi  Reply with quote  

http://www.mohinimisra.com/
the escorts in Delhi are really breathtaking companions for you. They gauge from every angle and hug and love you accordingly. While having interaction with them, do not hide anything from them. Let them know what you like and what you do not like. Even if you are novice, you will be provided guidance by them. Smile Smile Smile
Post Mon Dec 04, 2017 11:14 am
 View user's profile Send private message
sonamsharma380
First Time Poster


Cash: $ 0.20

Posts: 1
Joined: 04 Jan 2018
Location: Delhi
Delhi Escorts Female  Reply with quote  

Delhi is one of the most happening place in India for fun, joy and services, services like which gives you pleasure a lot of pleasure, we provide pleasure through Delhi escort services with a touch of professionalism and most importantly with client satisfaction.
Escort services in Delhi
Post Thu Jan 04, 2018 7:27 am
 View user's profile Send private message
vaduvala
Senior Member


Cash: $ 130.10

Posts: 665
Joined: 27 Feb 2018

 Reply with quote  

Your home ownership entitles you to a potential $9,000 more in deductions than you would have claimed had you not bought a house. If you fall in the 32 percent tax bracket, multiply $9,000 by 0.32 to find that home ownership saves you $2,880. If you are in the 12 percent tax bracket, your savings would only be $1,080.home loan principal is part of Section 80C of the Income Tax Act. Under this section, an individual is entitled to tax deductions on the amount paid as repayment of the principal component on the housing loan. An amount up to Rs. 1.50 lakh can be claimed as tax deductions under Section 80C.So, you can deduct up to ₹ 1.5 lakh of the principal amount repaid from your total taxable income. Purchase or construction to be completed within 5 years of taking loan. This Deduction can be claimedfromthe year in which construction of the house is completed.

what is a telecom technician? - Fieldengineer
Post Tue Nov 30, 2021 8:20 am
 View user's profile Send private message Visit poster's website

Goto page 1, 2  Next
Reply to topic
Forum Jump:
Jump to:  
  Display posts from previous:      


Money Talk © 2003-2022

Crypto Prices