Mike Wellman wrote:
- quote -

Mike - if she does the planning/forecasting I suggest, she will be
better informed. Since she offered no numbers, we do not know. She may
be only a dollar away from looking to itemize, or she may live in a
state with no income tax and realize, as you imply, that the house
provides nearly no write-off. The stunt which was the original question
needs to be looked at carefully as it may very well be as stupid as you
stated. OTOH, she may be married (we do not know) and earning enough so
she's already beyond the STD deduction. It sounds like that's not the
case, and I lean toward guessing that you are right on target. The visit
with TurboTax should prove it, either way. She may be in for a rude
awakening.
Joe
www.blog.joetaxpayer.com

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On Mar 11, 10:44�am, joetaxpayer <joetaxpa...[at]nospam.com> wrote:
- quote -

And the people buying the house they could not afford with an ARM were
sure their income would rise to meet the increasing payments when the
rate adjusted or some other magical thing would happen.

Will her house payments be the same as she pays for housing now?
Because it will take quite a payment to include enough benefits to
cover her taxes not withheld. If she takes the standard deduction now,
you will have to surpass that before the first dollar of benefit. And
thern take into account only a few months of benefit.

If the house payments are higher, how will she make those. Will she be
making a higher payment out of the same tax benefits she will be
paying back taxes out of?

I'm just sayin.

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Paul Thomas, CPA wrote:


- quote -

This is what I meant to imply. She should do a rough run of 2008 (not
07) tax year. That will tell her the impact for the partial year she
will have those other items (The points, if any, mort interest, property
tax). Once she has a closing date, those numbers are easy to find, and
should help her adjust the W4 for the rest of 08. Of course, the impact
will be small, if any, as we get toward the end of the year.
Joe

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"joetaxpayer" <joetaxpayer[at]nospam.com> wrote
- quote -







Remember the later in the year she waits to buy is that much smaller of a
deduction for mortgage interest and property tax that you can get from the
house.


Consider cutting back elsewhere with personal spending to create that
savings.


Of course, if she anticipates a large refund this year (because she got a
large refund this year) then change her withholding accordingly to have less
withheld should be part of her plan to generate the savings necessary for a
downpayment.





--
Paul A. Thomas, CPA
Athens, Georgia

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In misc.taxes.moderated, Sallymae wrote:

- quote -

I think this may well be a good idea -- not withstanding the
contrary opinion. The person may have some mortgage points being
paid that would reduce the income tax if the person itemizes. Also,
she should then have the withholding increased later in the year to
mostly make up for the missed withholding. If the withholding is
insufficient, there is interest penalty to be paid, but it's not
nearly as bad as credit card interest.

Assuming the house makes sense otherwise, I think this would be the
right time of the year for that to work nicely.

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Mike Wellman wrote:

- quote -

I don't know that I'd be so harsh. She should look at her taxes for this
year to plan ahead. She should have some idea of the property tax and
mortgage interest for 2008, as well as her state tax and charitable
deductions. These cover most of the common schedule A deductions. I'd
then suggest adjusting her withholdings (W4) only enough to get close to
zero owed or refunded for this year. If she makes no adjustments when
she buys the house, she's likely to get a large refund, lending uncle
Sam some money. If she can't buy the house without the borrowing from
her taxes due, she cannot afford the house and should get very frugal to
save up. Not to pick your wording apart, but "probably make up the
taxes" doesn't sound too confident to me. She should leave the closing
in a strong position, not a month or two away from bankruptcy if she has
some emergency.
Joe

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On Mar 10, 9:25�pm, Sallymae <opm...[at]yahoo.com> wrote:
- quote -

These are the type morons that are now claiming the mean mortgage
company took advantage of them and they need the taxpayers to bail
them out. Of course it is idiotic.

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Hello all! I have a friend who wants to buy a house for the first time
this year. She is planning on telling her employer not to take out any
taxes for a few months so she can save up additional money for a down
payment. She says that she can probably make up the taxes that she
will owe from the deductions of the new house.

Is this possible? Is this a wise-move?

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >