Quote:
Originally Posted by coreys
Thanks for your reply Jim. Check out my response to Disney Steve regarding income and expenses. As far as normal tax return, I can't answer that since we are only 6 months in to making this level of income.
Equity in house 7000 owned for 1.5 yrs
We have a bonus of 25,000 gross coming to us in March that we were planning on placing into an emergency fund. Although it will probably be more the in the ballpark of 13,000 after taxes.  That should get us started for savings-plus our credit card debt will be gone by then as well according to my plan.
What are your thoughts on the 401k situation regarding limits to contributing?? |
Is the high income likely to continue for forseeable future?
I did not see you add the expenses in your response to Steve- what are the budgeted monthly expenses?
Pay off SL before Home equity- at this income you want every deduction possible.
Max the 401k
Make sure you SAVE 20-30 percent of your new income. If you save 30 percent (83k per year), it would be OK to spend 20k or so (10 percent) on vacations or other short term wants.
Once you are saving the 30 percent... then pay down debts. You probably want to find someone to do your taxes and give you specific tax advice- keeping the mortgage will lower your tax bill.
It might cost you 400k in interest, but it could save you 600k in taxes. Have an accountant or tax professional run the numbers for you.