In preparing my taxes for fiscal year 2009 I have come to an understanding of some things I thought I might share with all of you. Forgive me if you already know this.
If your long term struggle is to pay off other debt or your student loans first then here are some tax tips.
Your student loan interest is tax deductible up to $2500 per year. This deduction taken before your itemized or standard deductions - so you get to take the deduction whether or not you itemize.
Taxes and interest on your home are only deductible if you itemize so pay your home mortgage off first - especially if your interest rate is higher on your mortgage.
Something else to keep in mind - if your student loans are federal - it is again in your best interest to pay the home of first. In this way - if you pass away - your spouse is protected from your debt - because federal loans are forgiven upon death.
If anyone has any other tips or thoughts on the issue please feel free to post your follow-up comments here.
Warmest regards,
J. Densmore
Monday, February 15, 2010
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