Tax Deductions For Homeowners Energy

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Tax Deductions For Homeowners

July 25th, 2010

Tax Deductions For Homeowners

Question: bought first home, now looking at paying off debt vs saving?

I recently purchased my first home and will receive the 8k 1st time homeowner credit. My mortgage aside, I am looking to payoff some debt and would like some opinions. After my mortgage and personal expenses, I will have about 2k per month and a minimal amount of savings (2k), put most into home down payment. Here are my loans

4000 car loan @ 9.5%
3000 personal loan @ 6% (borrowed from 401k for downpayment)
2000 private student loan @ 5%
5000 private student loan @ 4.25%
25000 federal student loan @ 7%
zero credit card debt

I’m pretty sure about paying off the 4k car loan, but am hesitant about the 3k 401k loan until I have a bit more saving built up. I figured that I would chip away at the student loans down the road as the interest is a tax deduction. Is it better to pay off some of these debts or save? Plus I want to be prepared for anything that might come up with the house.

Answer: You should payoff the 401k loan first. If you get laid off the 401k loan has to be repaid within 60 days or else you will be charged a 10% penalty plus federal and state income taxes.

That can amount to up to 50% of the amount distributed and you don’t need a $1,000-$1,500 tax bill if you are laid off.

Items on Amazon Right Now for Tax Deductions For Homeowners:

Horner Wants Cap on State Mortgage Deduction

St. Paul (AP) _ as Minnesota governor, independence party candidate Tom Horner says he would “take a hard look” at tax code carve-outs, including deductions homeowners take on mortgage interest. Horner said Thursday he favors capping the tax deduction homeowners can claim, although he didn’t set an amount. read more

Drew Miles | Tax Deductions For Homeowners