I’m not saying the house route is the right thing for everybody, but I stand by my original statement as is:
If you want to get back large sums of money from the government, and you want to stay single:
BUY A HOUSE
As it turns out, my mortgage + insurance + taxes still ends up being about $200 less than what I was paying for an apartment. A NICE apartment I’ll admit, but still a money-vacuuming, rent-check-down-the-toilet brand standard apartment.
I still pay the same “rent” per se, but that extra $200/month goes against the principal of the loan, therefore cutting a 30 year loan down to a 17 year loan. Plus every time I put money into the house, it stays there, as opposed to going into my landlord’s pocket.
I also hated having people attached to me. And I hate that the jerkoff maintenance people can come in and do stuff whenever they feel like it. Read your rental agreement, it’s in there… “Necessary maintenance”
BTW, you don’t have to buy a HOUSE, you can also buy a CONDO, or a CO-OP, and get similar tax advantages. I bought a co-op (a studio), and get my mortgage and real estate tax deductions. On top of it, my monthly mortgage + maintenance fees are less than I’d pay in rent. Plus… if it goes up in value, that extra equity will be a nice help in putting together a down payment for a HOUSE.
Add me to the gang who’d rather pay in springtime than lend the gubmint money at 0% interest. Sadly, this will not be the case this year and I’ll be getting a wad of cash back.
<gloat time>Should I console myself in Mexico or Cuba?
I got married last year, we both took the lifetime learning credit (finished school last year), and I only really worked half the year (so my employer over-withheld because they withheld like I worked the whole year), so we’re getting a pretty monster refund (like $5,000). We’re one of the 51% of Americans who experience a marriage bonus instead of a marriage penalty because our incomes are rather far apart (so some of my high bracket income gets put into the lower brackets on top of her income).
Alas, our marriage bonus will be less next year because she just got a new job, doubling her salary (hurray!) (but mine is still about double her new salary, so we’re still in bonus territory).
Since the thread title is “Tax-time blues” here is my contribution:
DT’s Tax Time Blues*
In the middle of April my taxes are due
but I’ll file for an extension before I am through
My accountant done told me that it doesn’t look good
Cause I ain’t got the deductions ya know that I should
So I totaled my write-offs but it just ain’t enough
and I gave till it hurt and that made it rough
But even with “turbo” there just ain’t no way
Come that dark day in April, I’m still gonna pay
So I’m crying, I’m crying them 1040 tax-time blues
It’s just so trying – them mean old 1040 tax time blues
They’ll garnish my wages and take all I own
And leave me with nothin’ not even a bone
the one time I cheated ya know that they caught it
Oh man did I suffer through that IRS audit
They’ll take all my dogs and my rifles too
then come back for my “Studie” I know that it’s true
So I’ll pay all my taxes to stay clear of a mess
And I won’t piss off the agents at the IRS
Oh baby I’m crying, I’m crying, I’m crying them 1040 tax-time blues
It’s just so trying – them mean old, them rotten, them dirty old, 1040 tax time blues
*Typical blues beat
Actually, I will get back a couple of hundred this year.
Also, if you’re going to finance a new car, you can use a second mortgage or a home equity loan as a way to increase your deductions.
You can either A)deduct tuition and fees from your gross income (thus dropping you into a lower tax bracket) or B)use that to claim your educational credits. You just can’t do both.
I figured my takes both ways, and claiming my tuition as educational credits was better, but only by a hundred bucks or so (hey, I’m not complaining!).
I’m a bit pissed at my planning this year. Thanks mostly to a pre-payment penalty for a refinance, I’ll be getting about $15K back from fed and state. On the one hand, sure, it’s an extra $15K I wasn’t entirely expecting. On the other, I could have had an extra $1000/month the last year and still had a cushion.
I am 27 years old, and this is the first year I have ever filed a tax form. (I was a dependent for a long time, or else I didn’t really make any money, and I haven’t earned any since I started med school.)
It’s all rather daunting. My situation is almost exactly like that of TaxGuy–got married, worked half the year, paid an assload in tuition for the other half. I also bought a house halfway through the year, but I don’t think my deductions there quite add up to more than the standard deduction. It will help a lot next year, though.
I’m pretty sure I’ll be getting a nice check back from my uncle (which is good, since there are credit card bills to pay), but the whole subject just frightens me.
