I must say, I was incredibly impressed with both Derek’s resolutions and with his promise to update his readers regularly on his progress. I still am not sure about my resolutions this year, although there’s one from last year that needs to be on the list again. At John‘s suggestion, I had resolved to spend two nights a week at home. I have failed miserably on this front. Now that I’m buying my place, my monthly housing expenses are actually going to go up — I am already making changes in my spending habits to prepare. I haven’t bought any clothes, I have been bringing my lunch and/or breakfast to work almost every day, and am eating out less (believe it or not). Also a while back (and somewhat more related to Apartment Therapy than anything else), I decided to start entertaining more. Very low key — brunches, Sunday dinners, and have been doing that as well, although not as often as I’d like. So — inspired by Derek, I’m going to think a bit more about my resolutions and post them here. Any suggestions (the NYC triathlon is already on the list)?
Resolutions, or Lack Thereof
I must say, I was incredibly impressed with both Derek’s resolutions and with his promise to update his readers regularly on his progress. I still am not sure about my…
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When you say your expenses are going up because you bought your place, are you taking into account the interest tax shield from your mortgage? You can deduct ALL of your interest from your income when figuring out income tax payments due the gov’t. In the first few years of owning, almost all of your payment will be interest (little or no principal), which means that you can mentally mentally subtract around a third of your mortgage payment — which goes right back in your pocket in the form of tax savings. You can up your deductions so you don’t end up getting it all back at the end of the year (there’s actually a penalty if your refund is too high, plus, it’s nice to have the $ in your pocket as the year goes on). That is something that pleasantly surprised me when I first bought a house.
When you say your expenses are going up because you bought your place, are you taking into account the interest tax shield from your mortgage? You can deduct ALL of your interest from your income when figuring out income tax payments due the gov’t. In the first few years of owning, almost all of your payment will be interest (little or no principal), which means that you can mentally mentally subtract around a third of your mortgage payment — which goes right back in your pocket in the form of tax savings. You can up your deductions so you don’t end up getting it all back at the end of the year (there’s actually a penalty if your refund is too high, plus, it’s nice to have the $ in your pocket as the year goes on). That is something that pleasantly surprised me when I first bought a house.
Yes, I’m afraid so. I had a great bargain on rent (for NYC standards), but even with the new expenses, it’s still within reason.
Yes, I’m afraid so. I had a great bargain on rent (for NYC standards), but even with the new expenses, it’s still within reason.
Since you are not closing until Dec, the majority of your tax savings will be in 2008. However, take your closing statement with you to your accountant for 2007. Some of the closing costs may be fully or partially deductible in 2007.
Since you are not closing until Dec, the majority of your tax savings will be in 2008. However, take your closing statement with you to your accountant for 2007. Some of the closing costs may be fully or partially deductible in 2007.