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Deducting Your Home Office

MoneyWise / Rob West and Steve Moore
The Truth Network Radio
March 4, 2021 7:03 am

Deducting Your Home Office

MoneyWise / Rob West and Steve Moore

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March 4, 2021 7:03 am

In 2020, millions of people found themselves working from home for the first time, and maybe you’re one of them.  But does that qualify you for a home office deduction on your taxes? On the next MoneyWise Live, hosts Rob West and Steve Moore have some ways to determine if you qualify for the deduction which could help you save on your 2020 tax bill. Then they’ll take your calls and questions on any financial topic. Deducting your home office on the next MoneyWise Live at 4pm Eastern/3pm Central on Moody Radio. 

Finishing Well
Hans Scheil
If Not For God
Mike Zwick
Finishing Well
Hans Scheil
Rob West and Steve Moore
Rob West and Steve Moore
Rob West and Steve Moore

This is Doug Hastings, VP of Moody radio and were thankful for support from our listeners, and businesses like United faith mortgage. My grandma loves Ice-T. It's her thing. So I go to hang the grandma for a bit and I see she's holding her big plastic cup with her T the cup is literally sitting inside one of grandpa's sports socks. I'm not making this up.

No one can make this up grandma you okay of course dear the socks soaks up the sweat and keeps the tea colder. Hey, it's Ryan from United faith mortgage and as I thought about it later. I thought that's the kind of mortgage team. I want us to be the kind that's willing to take any step needed to get the job done on your new home purchase, refinance, or cash out refinance and can we help everyone know, obviously we can't know were willing to use grandpa sought to keep a drink called you know were willing to do whatever it takes to make sure you're taking care of.

We are United faith mortgage not a faith mortgage is a DBA of United mortgage Corp. 25 Millville Park Rd., Melville, NY license mortgage banker for all licensing information, go to NML as consumer corporate MLS number 1330. Equal housing lender not licensed in Alaska, Hawaii, Georgia, Massachusetts, North Dakota, South Dakota and Utah and millions of people found themselves working from home for the first time in 2020, maybe you're one of the buses that qualify you for a home office deduction. The answer is it depends, but if you do qualify could save you hundreds of dollars or more tax bill fibroblast president of Kingdom advisors. The board is off today it a bit. I'll take your calls and questions of 800's, 525-7000. That's 800-525-7000 first deducting your home office.

That's next right here moneywise live all right. I guess I should get this out of the way first. I'm not a tax guy so I want to encourage you to talk to a professional before claiming the home office deduction but give you the high points today so you can decide whether it's worth pursuing. Now you may want to grab a pencil and paper. If you think you qualify because it does get a bit complicated.

You see, there are two levels of qualifications for deducting a home office. In addition to working from home for the first time in 2020. Some folks may have had their employment status changed from a regular W-2 employee to a 1099 or what we call a contract worker. If that happened you good news. You only have to meet the first level of qualifications to deduct your home office expenses now. What might those be well.

The most obvious one is you use a part of your home regularly and here's the key exclusively for work.

Let's say you've converted the guestroom into your office while you can no longer use it as a guestroom so desks and filing cabinets. Okay bunkbeds account should big screen TV not okay.

And since the deduction is based on square footage. The larger of the space devoted exclusively to work. The bigger the deduction.

Okay now that you're using the space for business only. You must also meet one of the following three requirements. First, at your home office is your principal place of business. That's pretty easy to meet if you do all or most of your work there next if you work in more than one location.

As long as your home office is where you perform your most important work that directly generate your income.

Well, it still qualifies for the deduction. But here's an example.

Let's say you're in sales and you do most of your calls saw or zoom meetings for home but occasionally meet with the client in person, but you can still claim the deduction that if you missed on the first two.

You still have one more shot at this you could qualify if you use the space to conduct administrative or management activities for your company and the company provides no other space for that work. That would be things like billing, bookkeeping, ordering supplies, so perhaps setting up appointments and even writing reports, but again the majority of that work must be done at home.

So if you're a 1099 worker and use the space exclusively for business and you also meet one of those other three criteria well then you can claim the deduction.

Now if you're a W-2 employee. This way is where things get a bit tougher for you to qualify for the home office deduction as an employee working in your exclusive office space in meeting one of the other three requirements I mentioned, you must also pass what's called the convenience of employer test. Now what is that you ask. Well, it simply means that no other space is provided for you. It must also be necessary for the business to function properly.

And finally that the space must be necessary for you to perform your duties and that's a pretty high bar to reach for most regular W-2 employees, especially those who found themselves working from home at times during the covert shutdowns. That's because in most cases employers still provided workspace for their employees. Some folks may have worked from home a couple of days a week and then went into the regular office for the rest that employers were rotating staff in and out, in many cases to keep personal contact to a minimum while still having the brick-and-mortar office demand, but there's still 1 More Way that you could qualify for the home office deduction as a W-2 employee and that's if your employer required you to perform work during off hours when your regular office was closed that could qualify so granted.

As I said at the very beginning, it gets pretty complicated.

If you couldn't take notes is more information in IRS tax tip 2020 – 98. That's it. will put a link to that in today's show notes. I also recommend the as always, consulting with a tax pro before taking the home office deduction, especially if you're a W-2 employee. Are your calls or next. Here's the number 800-525-7000 800-525-7000. This is moneywise live back to moneywise live unravel as Steve Moore has the day off today. This is the program where the 2300 verses on money and possessions found in God's word intersects with today's financial decisions and choices. And we'd love to help you process whatever's on your mind and heart related to your finances today looking at your issues and questions through the lens of Scripture.

That's what we do here in this program.

The number to call. We do have a few lines open 800-525-7000. That's 800-525-7000 and idea open to the program today was talking about the home office deduction related to taxes and again a high bar if you want to go back over it. You can listen to the replay of this broadcast will also have a Lincoln or show notes to the details it You know it does. Always make me reminded though, the fact that so often, myself included, we get to a place where we resent our taxes.

We shrugged her shoulders. We think about tax season and yet I have to remind myself and I'll remind you know taxes are symptomatic of God's provision. That's the reality.

If we don't have income, we don't pay taxes.

So what went into this tax season turning our paradigm upside down and realizing that our ability to pay taxes is really representative of God's provision and direction in our lives through the resources that he has provided. Maybe that'll approach. Maybe that will cause all of us to approach it ever so differently this year again the number to call today to get in on the conversation.

800-525-7000 800-525-7000.

Let's go to Laura on the Big Island of Hawaii. Laura welcome to moneywise live thank you will not likely hello I you are talking about the whole make I 99. Real state agent and I going to the office, maybe once every 10 days the rest of the time I work at home.

Can I claim the home exemption.

Yeah, you know that there's a number of hurdles there now given the jury contract employee Laura it's going to make things a bit easier because you as a W-2 employee.

You don't have to get by that hurdle of the desk being provided for you. But again, if you go back through each of the requirements that I mentioned first would be you have to be able to say that the piece of your home that you're using is used exclusively for work.

So I guess that would be the first question where you're working, is it a part of the home that's used for other personal activities or to use it for home exclusively in my home office. One room is dedicated to that, I forgot to mention I also pay a debt to go along to the company, but I don't have anything to do it and not necessarily so the your principal place of business though is your home and if you do in fact have a place dedicated for work exclusively.

That would obviously be key you. I think what you need to do is just contacting a tax professional.

Go over the specifics of your situation. Going through all of these requirements to make sure that you can in fact meet them. One of the time before you think about claiming this.

If you've never done it before you. I recommend any kind of change to your tax situation be processed through the lens of a professional first to make sure number one that you're taking full advantage of the law with anything that is due to you but that you're not taking anything beyond what's permissible so it sounds like you. You certainly have a good case given that your contract worker is a real estate professional using a place in your home that's dedicated exclusively to this type of work. But again, I would want you to go through each of those requirements. First, thanks so much for calling today that we appreciate it very much. Let's move on to central Maine and welcome Ross to the broadcast Ross year on moneywise live I will appreciate any God bless. So everything that you guys do.

Guys are definitely a blessing for you. The reason for the qualities a month a little confused. The Lord blessed me with their finances to purchase a house outright hearing central Maine, transplant from Long Island into expense about their so my wife and I have been looking at houses is coming up to retirement soon on a number 57 but the planning ahead and am looking to get a house down in Florida but I don't know if I should still get a mortgage down in Florida and in make payments on that. What once we get established and sell the house but I don't want to upset God's blessing. So the euro direction. It still. I appreciate that Ross and first of all congratulations for having your primary residence, paid off, did you say your anticipating relocating there eventually and making that your primary residence or do you plan for this to continue to be a second home indefinitely second home. We will plan on coming up for Rob. The summertime and I go back down and what time we kind of like snowbirds you okay very good.

Well yeah here's my thoughts. I like the idea that even though this is an investment property necessarily.

This is really just a second home. I like the idea of you getting the mortgage on that second property not on your primary residence.

Now keep in mind that if it's not your primary residence, you gonna play pay a slightly higher interest rate should be less than 1/2 a point higher if it was a true investment property, it would typically be somewhere between 1/2 a point and three quarters of a point higher, but because it's just a second home probably less than 1/2 a point, but why would you do that and not just put it on your primary residence. Well, primarily because I would like to keep your primary home just that and not put it at risk in the event something unforeseen happened and you are unable to make that payment.

I wouldn't want your primary residence to be at risk, and rather it be only related to the second property for some reason in a desperate and dire situation. You had to let it go. So for me it keeping those two things separate. Keeping your primary residence, free and clear is worth paying just a little bit more in the way of interest. Some may disagree and say no it's not worth paying that extra money I just like to keep things separate the I think the only other option would be as if you were looking to downsize with your home there in Maine and you could then take part of the money that you would pull out of that property prior to buying something new and used that to either buy the home in Florida outright, or at least further reduce the mortgage that you would be assuming or taking on to make that purchase.

That would be you know, the only other consideration. But if you worked it into the budget. You feel like you've got a plan B able to cover that mortgage and stay in your current residence. I may think that's the key that it's not disrupting any other plans that you have and have been working toward. Does that make sense actually kinda like what I was very confirmation but keep it electrical, but something happens you don't down in Florida wiped out by a hurricane is like that. We stopped to look yeah that's exactly right. And you worked long and hard to make sure you're in that position. I wouldn't want to disrupt that for any reason. Hey, thanks for listening for calling today. We appreciate it very very much, and we've got to the room for a few more costs 800-525-7000 800-525-7000 before we take our first break.

Let me remind you that we have a brand-new app out that we'd love for you to take advantage of you confided in your app store when you visit and search for moneywise biblical finance.

It's a digital envelope system, the community, and even the best content and biblical finance all in one place.

Check it out today again to set up your app store Google player Apple and search for moneywise biblical finance much more to come right around the corner on moneywise live streams to moneywise live on around West Timor has the day off so glad you decided to join us today that even watching the stock market we been noticing some so the last several days.

Today was primarily because we had a chance to hear from federal reserve Chairman Powell and market didn't like what he had to say. Essentially, he's more focused on the economy getting going and keeping people working which are very important things that he is the potential inflation concerns that are out there and so the investors were looking for him to signal that he might be willing to raise rates a bit quicker than they Fed has said they will. He gave no such indication and, consequently, we continued our selloffs.

Good news though we are not focused on the short-term borrowing. We're really when we talk about our investing and focused on the principles we find in God's word, which just simply say we should have a long time horizon that we should be seeking a return on God's money, but we should do so in a diversified manner trying to ride the ebbs and flows of the market data, day or month to month, but if were invested for the right reasons. With God's money and we have the right perspective, we got a good plan. We got the right time horizon then were in it for the long haul.

In the daily moves of the market really are not of concern to us.

So I think it's a good place to be reminded, especially after a few days of selloffs in the stock market back to your phones. We got the one line open 800-525-7000.

Let's go to Michigan Denise year on moneywise live go ahead, her journal and I share something that I learned financial seminar and I wanted to share it. We were so deep in debt. It was just crazy on that gentleman that went leading the salmon accent. The reason for getting out of debt if and could have more money to have more money to give just changed our perspective so much now so many years later and I know when I am 92 and down and what is my question is, all these things that come in the mail. Figure getting charities there so many of them and they have many good reasons to have.

I don't know should I pick out a few and get a little bit of money to each of our should I just pick out 100 and continued to eat just get it.

We do have things that weight and supporting for years different than something that I want to give extra well it makes sense to me. Just first comment on what you are sharing just a moment ago and that is I couldn't agree more. You know, part of the reason that God blesses us is so we can be a blessing to others.

Meeting the needs of those around us, both locally and even to the ends of the earth, though we realize that we should be a conduit of God's activity not the bucket where God's provision stops with us but a pipeline directing a flow of God's activity into where he is at work so I couldn't agree more. And I love that you have a passion to give. I think the key as it relates to the where of giving really begins with your plan. So there's the financial side in terms of what you're going to pre-commit in the way of giving dollars, perhaps at the beginning of the year were a couple of times during the year. Now that doesn't mean we don't leave room for the Holy Spirit to move in you to give beyond that, as the Lord leads, but there should be up a predetermined amount that I would look at at least annually to say this is what I want to give and I would look both out of income that which is coming into you from whatever sources as well as assets your balance sheet are there appreciated stocks that I could give in a way that's tax efficient to bless the ministry do I have a piece of real estate that I no longer need and I want to put it to work in God's economy and give it away so looking at that annually is going to give you a dollar amount and then again leave room for the Holy Spirit to move. If for some reason you want to change that. Throughout the year, but once that's been determined that I think it's a matter of deciding where you want to get not clearly you've already got things on your heart. There's things that really are important to you. I would look at the things that break your heart you know the things that really feel pain you in the name of Christ things that are going on around the world. Whether it's injustice or people who need to give physical needs met. Of course, spiritual needs to be met. I'd like to grill inventory of the things that God has really placed on your heart. Uniquely, those could be things here in your local community here domestically or even abroad and really think about the giving that you're doing and aligning that with God's heart from Scripture and your passions and where those two things, meet with the resources you've decided to allocate to giving.

I think that really should be the primary focus. Now does that mean that you don't give two other things along the way as the need is made known through the mail, or any number of other ways know you certainly could do that, but I wouldn't feel bad about passing on some of those. Just because somebody asked doesn't mean it's the right thing for you. You may be deciding to allocate your resources to something else that's on your heart and that's okay. I don't think you need to feel guilty about that. I think it's all about. Again, deciding prayerfully how much and then where and then allowing the Lord to let those plans that change over time. Dissent all make sense to you Denise okay I getting to God's chosen people solving any organizations out there that are that are doing that ministry for their physical and spiritual health. And now I get all of the things and then I wonder okay now which I should I get yeah yeah that's a good point and and that's where I would be looking at where do they have a good track record of the work that they're doing are they accountable you could even use a website like ministry or the national Christian fan foundation. It in CF to look at and evaluate these ministries because not only do we want to give to what's on our heart, we want to give to the places where God is working and where they have demonstrated excellence in the work that they're doing in Jesus name.

So take advantage of those resources and we appreciate your call today. Much more to come on moneywise live just around the corner will be right back. Stay with us back to moneywise live or biblical wisdom meets today's financial decisions going back to our phones we go to Minnesota next mark. Welcome to the broadcast right hip question on a previous employer and I left it there when I left about three years ago and now I'm gonna roll it over order actually did roll it over into annuity and wondering if that was a good move. It's it's an annuity with the guaranteed money plus the death benefit and 5% interest of the first until I start going out of it, however, that cost 2.6% to get all of that sure what I'm trying to do is get a steady income and all retirement I'm 61, who will be the okay very good. Yeah, you know, I mean first of all, in terms of rolling a 401(k) into an annuity, you know, you don't get the tax advantage that often people are looking for with an annuity because 401(k)s of course are already tax-deferred. It could have remained tax-deferred into an IRA so there's not any tax advantage to be gained by rolling the funds over into an annuity but clearly the reason you did it. Mark is because you want the fixed income option you like the guarantees and you're looking to convert that to an income stream that's going to supplement your retirement income in that season of life.

Have you looked at. I know you said there's a 5% guaranteed. I guess while it's still growing and then when you annuitize if you arty determine what that monthly income stream will be right around 15,000.

Okay annually are not. I'm sorry that annually probably be more like you know, probably after taxes 1100 bucks yeah and does that sync up with what your need is when you add that to other income sources including Social Security yeah you now will be in a pretty good range. I think it's not, it'll it'll keep us comfortable my life as you Roth IRA as well and she's going to start drawing her Social Security this fall and will put that right into her rock won't need it until I retire. Yeah okay well you know it's not a bad thing that mean in annuities are typically not my first choice. Just because, as you mentioned, they come with a host of fees and charges that may reduce what you have available to you.

It does limit your options because as you said, you know you can convert it to an income stream.

And that's great but you no longer have access to the principal. If you were to need it to you for a major expense like long-term care or something like that that might come up along the way. Also, just from an inheritance standpoint, they can be challenging.

Also now what is the upside, it's not all negative.

The upside is you were looking for peace of mind and so if there is a gap between the income you expect in the budget that you created for that retirement season and you can solve that gap with the income stream from the annuity you know what it is and that gives you peace of mind to know that you not worry about the ebbs and flows of the stock market of the bond market or anything else you've transferred that risk from yourself to the insurance company and there's a lot of folks that like to be in that position. I know that they've got something guaranteed every month they can count on and they can order their lifestyle accordingly and you know that will last for the rest of their lives. So I think you know that's the key so I wouldn't feel bad about doing that and I think again if it's going to put you in a position where you have what you need for that season in terms of covering your expenses. That's a good thing and so out from that standpoint, I don't know that there's any changes that are necessary other than just making sure exactly what the provisions are making sure you understand what happens beyond your life. With regard to your wife's ability to continue to collect that payout and then the tax implications as well so hopefully that's helpful to you, Mark. We appreciate your call very much today, let's go down south to Alabama and welcome Tom to the broadcast current very much. This concerns the question about our buyout.

30-year-old daughter, her employer's beginning in your retirement program will going to blanch at the .3% up to 6% of my question, I guess for someone her situation. The recommend Roth or traditional or username answer. Yeah.

So she has both good the Roth 401(k) as well as the traditional 401(k) available work yes okay yeah you know I like the Roth option for somebody who's young. And certainly she is. She's got time on her side. She's probably in the early part of her earning potential, which means she's not in the highest tax brackets by any means.

So although she's giving up a deduction in the current year, it's probably less than it will be down the road when she's earning more money and she's going to enjoy that tax-free growth between now and retirement which you were talking 3+ decades down the road so I I think you know all things being equal, I would probably choose in her situation the Roth 401(k).

The only thing to consider might be either now or in the future, splitting it between the traditional and the Roth. There is something to be said in that retirement season, depending upon what the tax code looks like and you what the her needs are in terms of income and so forth. Having her choice as to pick from the tax-deferred or the tax-free environment given so many of those variables that we just don't know what to look like 35 years from now. So that would be the only other option, but if she's going to choose one. I'd probably go with the Roth. Does that make sense. Thank you very much all right yes, we appreciate the your call today very much.

Let's go quickly to Canton, Ohio Renée, we got just a couple minutes before next break I can we help Carol and my out even though our annual Langdale and arrow weight and I'm happy and I don't have that incident near Allie planning there and have Allie planning planning there and I got Randall and I went need to make Bankhead and Kate planning to give pentagram back even yes and well Renée, let me just say first of all were to join you in praying that the Lord would intervene here you know nothing is out of his control. He is so your creator. He knows every cell in your body and so were going to just ask that he would bring his healing touch to your body regardless of what the diagnosis is.

Secondly, we should be all well-planned because we don't know if we have one more breath or 30 more years and so in terms of making that last stewardship decision. We will all make you me and everyone listening that we need to have a will in place to govern who will be the next steward of our assets and resources and in your case.

You also may want to look at a living will and to specify how you want to be treated in certain medical situations. I would give somebody a power of attorney. I have one for me. I would also say the Alzheimer's Association is a great publication with more information as well listen you stand them. I will talk a bit more off the air. This is money wise lives in be right back to moneywise live unravel as Steve Moore has the day off today were so glad you decided to join us. You have a question. You haven't been able to get through on the program and always email it and we love to from you. Let's take an emailed question.

Now this one actually came in last night to end. It comes from Heather. Here's what Heather writes my husband and I are expecting an extra cash payment of 19,000 after taxes and tied we expect to have about 10,000 we have a car loan of 21,003 to 4 months of emergency funds. The question is, would you recommend that we put the full 10,000 toward the car loan, or only a portion toward the car loan and keep the rest as a cash reserve and whether we appreciate your emailed question so much up your my approach would be this and by the way, let me just say I don't think there's a right or wrong answer here but I would probably build that emergency fund up to six months expenses with the money received that there's anything left put that against the car note, then I'd focus sending any margin each month to the extra principal reductions on the car and when that balance on the car gets low enough that you can pay it off completely out of emergency savings and still be left with say 1 to 2 months expenses and savings than do it, pay it off. Here's the thing.

At that point, you're no longer going to have a car payment, which would allow you to take 100% of that car payment plus any margin you were putting toward principal and re-build that emergency fund so preserve your cash. Let's focus on getting the car down, but we can pay it off, pay it off and then use the excess to build the emergency fund backup.

If you have a question you can reach us at let's go back to the phones and welcome Joe to the broadcast calling from Spokane, Washington Joe, you're on moneywise live good afternoon. Thank you for taking my call this two-part question here real quick. Might my wife is getting ready to retire after about 3738 years with the company and they'd given her early retirement were both 50, 58 years old and little early for her but we we plan for retirement very well.

Both my life since no working in our 20s and so the question is that I'd left the company. Back in, I found a very good investor that would to we took my money road.

It rolled it into I got a lot normal.

I threw them in them.

The question I hear I hear people say it's not always wise to invest in the same company. My wife's investment for long time with that company as it is it wise to think that we take that money and invested in the one company that we trusted or should we find somebody else that is capable of doing that. Just to say per se have been multiple baskets in case something did go wrong yeah let me ask this Joe when you talk about investing in one company are you talking about one brokerage firm or actually investing all of your dollars in a single investment which is one publicly traded company. You know I'm talking about wanting because we had that conversation went with the company on West End.

You know the way to explain it is we invest in many different market just stop by. So you're actually not in one, but I don't care. You know, our people have done very well for you. Now we we cannot we have ours in different places investment from as we want to be safe with very good I've done some tracking with you and just wanted to be sure your talk about a single investment is clearly I wouldn't advocate for that we want to be properly diversified know when it comes to an investment firm owned investment. A single investment professional yell. I have no problem with you having everything in one place. In fact, there's a good case for doing just that. Number one deal, the more you have, and investable assets, the more attractive pricing you're typically going to get in terms of the fees that are charged with the management of those assets typically reach certain breakpoints as the total assets under management. Even across multiple accounts.


That's number one number two that you avoid un-necessary and even unhealthy duplication of investments because often times accurate multiple investment advisors they probably are not coordinating the investments among themselves and so it may cause you not to be as strategically invested from a diversification or even a tax efficiency standpoint as opposed to having everything at one place and think the third thing is just the simplicity in terms of what you have to keep up with. You need only have one meeting every quarter or semiannually as opposed to yell that's the one conversation that you're having each time you have a question or you make need to make a change.

You cut the number of statements you're receiving in half so you know from my standpoint as long as this is somebody that has good track record. You built a good relationship with your happy with the communication. Obviously, the, the track record in terms of the performance on the investments that you had to this point, and preferably somebody who aligns with your values as a believer and understands biblical principles of managing money can help you lean into God's best for you. If all those things are in place and I would say having everything with one firm I don't have a problem with.

In fact, I'd encourage all some good news and I appreciate that the second portion of that is retirement coming up very quickly for her.

I'm capable of. You don't think she's worked her entire life. And so I I've asked her to relax, take it you know, take the time to retire and enjoy work work just fine. The other parking. That is, the ERA the early retirement portion of that is up and above what we have. She has stated through the long term of that career. I think I know what you say here, but you know if it would go hello from Anna on a house that's were quite a bit with property and we thought that ERA portion of that would be enough to pay the home off so I thought was I wanted to ask it, we will take the normal 401(k) rollover to that investment we have and we expect the other portion of that money.

There's an opportunity that we can leave it where it is in the company and because she's taking early retirement companies offering that at 59 1/2 she could start pulling from that money and all she would have to pay tax on that money, no penalties at all.

Is that a good idea or should we just take that money and also invest that and and work towards. Obviously, that money can earn a lot more if the market continues to do well but you know what with the COBIT 19 pandemic going on different markets and jobs are doing so well right now mine is been shaken up.

I have a very good job but at the end of the day in the next year there's really no guarantees of things don't pick up so should we pay the house or should we just leave it in and continue working. Get out till I'm 65 to retire.

Yeah yeah well you and I think again, there's probably not a right or wrong answer here. I like the idea of you becoming completely debt-free and if you can sink that Joe up with the time that you're moving into retirement, it's gonna pull the monthly expenses down. Obviously as low as possible because you're out of debt and you know right now you should be in a fairly conservative posture.

Anyway, given your age and where you are in terms of proximity to retirement. So as long as you do that in a way that makes sense from a tax standpoint not pulling it all out in a single year, but you do it. Over time, and preferably sink it up with the payoff of the house as you're moving into full retirement for both of you. I think that makes a lot of essential of a lot of peace of mind and flexibility. Hey, Joe. Hopefully that's that's helpful to you.

We appreciate your call very much today, let's go quickly to Joliet, Illinois, and welcome Linda to the broadcast hi Linda, this might like rental daughter and her children and they went and our current mortgage. When we originally bought the house. I thought my daughter was going to sell it but it's working out better for me to keep owning it.

While we fix it up because I can take advantage of the yeah the right off from fixing up the property.

I current mortgage is 3.99 and I would like to refinance it at the bank where my daughter works but there are only giving us like a 3.375 because it's a rental property for the difference. Yeah.

So 3.375 is a little higher than I would've expected them in a rental property can be as much is three quarters of a point higher, but your rates right now should be only around 2.62.75 percent depending on how long you're looking at suit tell me you're looking to refinance your primary residence is a part of this appreciate it a lot couple years ago and got it at a 30 year fixed and I would like to get down to a 15 year okay yeah and so you plan on staying in the while I assume is a right to rent it for me and Lynn paid off and picked up my plan is to put the title in her name. Okay yeah that's just not enough of the savings Linda to justify this, so I'd probably just get to call them and asked them get to give you an amortization schedule based on paying it off in 15 years so you know what you need to send in order to accomplish that. But I think the cost that you're going to pay to refinance it for that nominal savings on interest is just not going to make any sense unless you can get more attractive rates of perhaps the other option is to go to bank

Let's look at some online lenders get two or three more good faith estimates and see if you can get that rate down. I want you to save at least three quarters of a point here before, it would probably make sense for you to spend know anywhere from up to 2% of the value of the mortgage. In closing costs. Otherwise, again just get them to run the amortization schedule based on a 15 year a payoff and that you can accomplish the same thing with your current mortgage. Hopefully that's helpful to you.

We appreciate your call today very very much. And that's going to do it for us today. We appreciate you tuning into the broadcast today. Steve Moore is a mention has the day off today. He'll be back tomorrow, but I was so thankful for each of your calls today and we were covered a lot of ground talking about retirement talking about dad talking about giving all from a biblical perspective, and that's what we do here on moneywise live finalize live is in fact a partnership between Moody radio and moneywise media want to say thank you to my amazing team today Deb Solomon producing Amy Rios engineering Jim Henry providing research and cavity taking your calls today. I'm Rob Weston for Steve Moore will be back tomorrow for another edition of moneywise live

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