Our Financial Blog

Credit cards, car loans, mortgage, home equity lines of credit, student loans… Does the mountain of debt ever get any smaller? There are many different types of debt out there and knowing which debts you should you pay off first and which ones offer tax incentives can be an important concept to understand.

Tax Deductible Debt

For many tax payers, the interest on mortgages and home equity lines of credit are tax deductible for both personal residences as well as rental property. Student loan interest is also tax deductible for many tax payers. For this reason, these types of debt are often referred to as “Good Debt” because of the tax savings they offer at year end.

Non-Deductible Debt

Unfortunately, there seems to be many more forms of debt that most likely will not offer tax incentives at year end, such as credit card debt and car loans. This does not mean these forms of debt are completely unwanted, or necessarily worse than Tax Deductible Debt, but it is important to know the differences. For example, a car loan with a Annual Percentage Rate of 1% is by far less costly than a student loan with an APR of 6%, even factoring in possible tax savings.

So what debts should I pay off first?

Generally speaking, debt with the highest effective interest rate should be paid off first. For nondeductible loans, this is the interest rate. For tax deductible loans it is usually the interest rate times 1 minus the tax rate. Due to individual circumstances such as your income level, tax bracket, and the interest rate associated with all of your debt, it is nearly impossible to know what debts you should pay off first without knowing more information and speaking to a qualified Accountant or Professional. At Glen Barger & Sons Accounting Services, we can work with you directly to understand your unique situation to get you to where you want to be, which is financial freedom! Call or email us today to schedule your appointment for your 2010 Income Tax Preparation. During your appointment we can speak about your financial situation, including what debts you should pay off first!

Owing the IRS money is never a good feeling, but contrary to popular belief, they will work with you in helping pay down your debt. The following is a publication from the IRS that includes 10 helpful tips that will help taxpayers get back to square one. Additionally, if you are unfortunate to receive a letter from the IRS or your State/Local Taxation Department, don’t just pay it. Often times other missing information may help lower or eliminate the proposed amount. At GB & Sons Accounting Services, if you owe back taxes or have been receiving letters from the IRS, we can help you decipher their letters, communicate with the IRS, and understand what is needed to get you back on track! 

Are you looking for a quick, easy, and accurate tax preparation service?  Want your tax return done correctly?  Barger Tax & Accounting is offering Tax Return Preparation Services starting at only $150!  

February Tax Special Includes: 

• CPA prepared and filed Individual Tax Return
• Electronic Filing
• Personal Service!  
• Friendly and Reliable
• Local Family Owned Business
• Tax Expertise and Experience you can trust.

Whether you love Peyton Manning and his Denver Bronco or are a proud member of the Seattle Seahawks Defensive “12th” man, every tax return prepared by us in our office on Super Bowl Sunday will receive a chance to win a free tax return! All you have to do is guess the winning team and the margin of victory and your tax return preparation fees will be 100% refunded! 

Disclaimer: This contest is only available to clients who have their tax returns prepared by GB Accounting Services on Sunday, February 2, 2014 in our office located at 1200 Laurel Oak Rd, Suite 106, Voorhees, NJ 08043. One entry per form 1040, 1040A, or 1040EZ. Appointments are taken on a first come, first served basis and space is limited. Offer subject to other terms, details, and exclusions. 

Whether you love Peyton Manning and his Denver Bronco or are a proud member of the Seattle Seahawks Defensive “12th” man, every tax return prepared by us in our office on Super Bowl Sunday will receive a chance to win a free tax return! All you have to do is guess the winning team and the margin of victory and your tax return preparation fees will be 100% refunded! 

Disclaimer: This contest is only available to clients who have their tax returns prepared by GB Accounting Services on Sunday, February 2, 2014 in our office located at 1200 Laurel Oak Rd, Suite 106, Voorhees, NJ 08043. One entry per form 1040, 1040A, or 1040EZ. Appointments are taken on a first come, first served basis and space is limited. Offer subject to other terms, details, and exclusions.