Quote:
Originally Posted by capt_slow
I'm in the process of buying my first home and I'm told it's a common practice for people to claim more allowances on their W-4. The idea sounds simple enough, get a larger paycheck and come tax time the mortgage interest and property tax deductions would even out the tax bill.
Has anyone from CA actually done this? If so, mind if I ask how many allowances you put on your W-4? Short of talking to a CPA, the figure I'm crunching out is a whopping 8 allowances!
For reference, my budget is well below the 750k loan cap for the mortgage interest deduction. The property taxes in the area I'm looking at are also below the $10k cap.
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capt_slow Yes, do this. Reduce your Federal withholding. State (CA) does not matter.
It’s better for you to have your money than for the govt to make money on your money, aka the “float”. You should make money on your money. Plus you need the cash to pay the mortgage.
Do what you want. It gets squared up at tax return time.