help for my brother, buy vs rent

[LOL!]

Quote:

Originally Posted by Cute Fuzzy Bunny If he's making that much, he's gotta be in the 30-50% total tax bracket.* At that point, he'd be getting back a third to half of his money paid on the mortgage as a deduction.* Plus the deduction for the property tax.

When we lived on Long Island across the Sound from your brother, we made more money and were not in the 30-50% tax bracket. * We also rented. *I believe tax rates were higher then, and we barely cracked 28% including FICA taxes, Federal and NYState income taxes.

This idea of required "stability" for children is a myth as well. *My military parents lived in about 10 different places while I was still growing up. *Has it affected me? *Most definitely, but I think in
positive ways.

Anyways, by renting until our late 30's we were able to do other things with our money. *The idea that one needs to own a home is suspect.

Full disclosure: we own a house and it's the only place our 10-year old has ever lived. We live in a state with no income tax, so even though we make even more money, our tax rate is even lower than ever.

[cute fuzzy bunny]

Quote:

Originally Posted by LOL! When we lived on Long Island across the Sound from your brother, we made more money and were not in the 30-50% tax bracket. We also rented. I believe tax rates were higher then, and we barely cracked 28% including FICA taxes, Federal and NYState income taxes.

Federal married filing jointly for $120k - 25%; connecticut rate at that earning level - ~4.8%. Dont know what their deductions or other income are though.

[cube_rat]

Quote:

Originally Posted by Cute Fuzzy Bunny I think she IS a man. Anyone ever see her and dr. phil on tv at the same time? Didnt think so...

Come on Fuzz, Does she really look like a man?

[cute fuzzy bunny]

Uhh...yes! A scary one with makeup on!

:P

[cute fuzzy bunny]

Here she is without makeup

[tryan]

Quote:

30-50% tax bracket

Exceeding 40% is pretty tough to do ... federal top bracket is 33% (thanx to GB). But if you can make it anywhere ... it'ld be NYC. NY State and NYC city taxes are bad ... can't recall the rates.

[cute fuzzy bunny]

I paid...I think...35 or 38% to the feds one year and 9% to california.

Really, no applause. :P

[soupcxan]

Before you go hog wild over the tax benefits of the mortage interest deduction, remember that you give up the standard deduction which is substantial. If you have a lot of other itemizable things then it may make sense but 9 times out of 10 people overestimate how much the interest deduction is saving them, because they don't realize that they "lost" the benefit from the standard deduction.

Example: if your standard deduction is $5k and your interest payments are $9k, you only get the benefit from $10-9=4 times your marginal tax rate (at 25%*$4 it would only be $1k of incremental savings). The mistake people make is they multiple the $9k by 25% and say "man I'm saving $2250!" Assuming that they don't have any other itemizable deductions, of course.

[LOL!]

Quote:

Originally Posted by soupcxan Before you go hog wild over the tax benefits of the mortage interest deduction, remember that you give up the standard deduction which is substantial.

While what you write is true, it probably doesn't really apply in this particular case.* Folks in NY and CT pay so much state income tax that they probably itemize even if they don't pay any mortgage interest and property taxes.* * At least we itemized when we rented in NY for that reason.

[mathjak107]

taxes iving in nyc isnt so bad unless you have a large capital gain or large income and trigger the amt....our personal income tax and property taxes are still a combo lower than most long islanders pay in just real estate taxes....the problem is on a large capital gain you pay alot more....our city and state tax on our income this amounted to a flat rate from dollar one of 12% of every penny...my son who was a partner in the capital gain we got payed about 8% in new jersey...the difference in dollars and cents was 40,000 bucks between our city and state and his state taxes on the same amount of income

[Bimmerbill]

Thanks for the input. I sent along the links to the calculators to him. Not knowing any details about his finances I don't know what will work out for him.

All I know is when he said he would cut way back on his 401K to purchase a house, I told him he should rethink that strategy.

[Jay_Gatsby]

Quote:

Originally Posted by cube_rat Come on Fuzz, Does she really look like a man?*

She looks constipated. :P

[WRBT]

Suzy Orman is ok since a lot of the people who call into her show seem to be so completely lost that any positive advice is very helpful since it's more about what they need to stop doing than fine tune what they're doing right.

Watching that show is like not being able to help slowing down to gawk at a bad accident... you sit there scratching your head wondering:

1 - How "Silvia from Miami" managed to ring up 55K in credit card debt with a household income of $40k and not have her husband find out/

2 - If Silvia will be sympathetic enough of a caller to receive the vaunted GIRLFRIEND label from Suzy.

3 - Why their producer doesn't tell Suzy that the fake 'n bake is making her look orange like an oompa loompa.

[mathjak107]

we should start a susie topic....