In my case, AMT was an issue. Don't know for single head-of-houshold
filers.

On 1 Jun 2005, rwilson290[at]hotmail.com <rwilson290[at]hotmail.com> wrote:
- quote -

Yes, I increased my Federal exemptions on my W-4 and my refund the
following year was about 10% of what it had been the previous year
(hundreds instead of thousands). However, it would have been even more of
a difference if I had been responsible for full property tax the previous
year.

Something to note, unless your area does something different, is that you
should have gotten credit from previous owner for the property tax until
the closing date, which is usually due the following year (may have been
estimated). The year you buy (2005), you have no property tax deduction
(2004 tax due in 2005 reimbursed by previous owner). Next year you get
partial property tax deduction for the time since closing in 2005 (2005
taxes due in 2006). 2007 is the first year you get the full property tax
deduction.

Is $2600 your monthly payment (including escrow?) or are some zeros
missing?

On Wed, 1 Jun 2005 07:57:18 CST, Sandra Loosemore
<sandra[at]frogsonice.com> wrote:

- quote -

that it is appropriate to have your payroll withholding approximate
your anticipated liability.

As to whether an interest-only loan, and particularly one of this
magnitude, is also appropriate... that is another matter. <grin

-HW "Skip" Weldon
Columbia, SC

rwilson290[at]hotmail.com writes:

- quote -

Yes, this is perfectly normal, and even if it isn't "normal" for other
people, why not do what's right for *you*?

BTW, there's a withholding calculator on the IRS web site
(www.irs.gov) that you can use to figure out how many deductions to
claim for the rest of the year, based on your estimated itemized
deductions and taxes paid so far in the year. Watch out that
withholding for state taxes may be considerably different -- e.g.,
here in Massachusetts, neither mortgage interest nor charitable
contributions are tax-deductible -- and your employer might require
you to fill out separate federal and state W-4 forms if you want your
federal and state withholding allowances to be different.

-Sandra

I'm purchasing a home now and will have significant tax deductions
because of it. I'm single and make about 95k/year and will have a
$2600 interest only loan.

What I'm wondering is if it's considered par for the course for people
to increase the number of deductions they claim at their place of work
when an event like this occurs? I'd rather have the extra money
available to me in each paycheck to pay the mortgage and living
expenses, emergency funds, etc than deprive myself all year only to
give uncle sam an interest free loan until April 15.

In any case, is it considered normal for a first time home buyer, and
more specifically a home buyer making 95k with a 2600 interest only
loan to change the number of deductions they claim at work due to the
tax benefits? I believe I currently claim either 0 or 1.

Thanks.