I am trying to wrap my head around the numbers and figure out what to do.
I have a 30 year mortgage with a 6.38% interest rate. (I can recast this loan for a nominal fee).
I am in the 37% federal income tax bracket and have no state income tax.
I have a fully funded emergency fund. I max out all possible tax advantaged accounts (401k, backdoor Roth IRA, etc).
Please help me with the following two questions?
1. What should I do with the funds after I max out the retirement accounts - pay down the mortgage or invest in a taxable brokerage account?
2. I understand that the interest on the mortgage is tax-deductible - but I want to make sure I really understand what this means.
For example, last year I paid about $28,000 in mortgage interest. So with the $10,000 SALT cap and the $28,000 mortgage interest, my itemized deduction was about $38,000. However, a standard deduction would have been $27,700. So does this mean that effectively I was really only able to deduct about $10,000 for the mortgage, rather than $38,000? So effectively only 36% of the interest is tax deductible?
Thank you!
I have a 30 year mortgage with a 6.38% interest rate. (I can recast this loan for a nominal fee).
I am in the 37% federal income tax bracket and have no state income tax.
I have a fully funded emergency fund. I max out all possible tax advantaged accounts (401k, backdoor Roth IRA, etc).
Please help me with the following two questions?
1. What should I do with the funds after I max out the retirement accounts - pay down the mortgage or invest in a taxable brokerage account?
2. I understand that the interest on the mortgage is tax-deductible - but I want to make sure I really understand what this means.
For example, last year I paid about $28,000 in mortgage interest. So with the $10,000 SALT cap and the $28,000 mortgage interest, my itemized deduction was about $38,000. However, a standard deduction would have been $27,700. So does this mean that effectively I was really only able to deduct about $10,000 for the mortgage, rather than $38,000? So effectively only 36% of the interest is tax deductible?
Thank you!
Statistics: Posted by YoungMoney — Sat Nov 09, 2024 8:19 pm — Replies 5 — Views 326