Quote:
Originally Posted by GregWeld
Yeah -- you should probably just stick to bending metal.
The WRITE off.... can reduce your TAXABLE INCOME.... so the proper math might look more like...
A guy makes 100K taxable income
He pays 25K in interest
His net taxable income (without anything else) would be 75K.
Now not only is this guy saving the taxes on the 25K but he's also reduced his amount of taxable income which may have put him in a lower % tax bracket as well!
It's all very complicated -- and is something that needs to be worked out per individual and with a qualified accountant that can crunch the actual numbers.
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Yeah, that's what I'm saying, but wouldn't he have more money in his pocket at the end of the year if he did not pay the interest? ( 15 year term instead of 30 year term ) The higher taxes on the money you could have spent on interest (TAX FREE) have to surely be less then the interest paid. So what if it puts you in a higher tax bracket. Your not paying all that interest either.
I understand it all depends on each persons own position, but I think the more money that ends up in your pocket the better.
Back to the shop.