| Office Hours |
Tax Season (February 1 through April 15th)
Office hours are Monday through Friday 9:00 a.m. until last daily
appointment (usually 7:00-8:00 p.m.) and on Saturdays 9:00 a.m.
until last appointment (usually 3:00-4:00 p.m.). During this ten
week period we do not close for any Holidays.
After Tax-Season (April 16 - January 31) hours are 9:00 a.m.
to 5:00 p.m. Monday through Thursday. We are closed on Fridays for
field work. We also close on all Federal Holidays. Our office is
closed during the two week period that includes Christmas and New
Years Day in order to upgrade and perform annual maintenance on our
computer network for the upcoming Tax Season.Scheduling an
Appointment:
With the majority of our clientele being in the Huntsville and
Birmingham metropolitan areas, we maintain direct phone lines from
those areas. In Huntsville call 534-6922. In Birmingham call
322-7452. Our local Arab telephone numbers are (Area Code 256)
586-4111, 586-4112, 586-4113 and 586-4114 (if using a cell phone,
please use one of these numbers).
Available appointment times on the hour are: Mornings
9, 10 or 11, Afternoons 1, 2 or 3 and Evenings 6, 7 or
8 (no evening appointments on Saturdays). |
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Paying Off Your Mortgage Early
By: Gregory J. Cook, EA, CPA
Could you afford to add a little more to your mortgage payment each month? It
might be a good financial strategy for you. Typically, paying extra on your
mortgage each month can save you interest and help you pay off the loan sooner.
But, before you increase your mortgage payments, look closely at your loan's
interest rate, your tax situation, and your complete financial picture.
Interest Rate
When you prepay your mortgage, in effect, you earn the mortgage rate on the
extra money you pay. For example, if your interest rate is 9% and you decide to
add extra money to your monthly payment, your pre-tax earnings on that extra
payment would effectively be 9%. This means that you would be better off
prepaying your 9% mortgage unless you could earn more than 9% by investing that
extra money elsewhere. Before prepaying, compare your mortgage rate to the
pre-tax rate you could earn from an alternative investment to determine which is
the best option.
Tax Consequences
If you itemize income tax deductions and fully deduct your mortgage interest,
you might not want to prepay your mortgage. By paying extra each month, you will
be paying less interest overall and, as a result, your interest deductions will
be reduced. In deciding whether to prepay your mortgage, you'll have to consider
the effect of lower interest deductions on your income taxes.
If you are paying 6% interest on your mortgage
and get the full benefit of the tax deduction, it really only costs you 4.2%
if you are in a 25% federal and 5% state tax bracket.
It is important to remember that for every $3
you pay in mortgage interest, on average you will save $1 in taxes. Also,
the federal government will give you a Standard Deduction in lieu of
Itemized Deductions. Itemized Deductions consist of medical expenses, real
and personal property taxes, mortgage interest on primary and secondary
residences, investment interest expense, charitable contributions, employee
business expenses and other miscellaneous deductions. Ascertaining the tax
impact requires looking at all of these other deductions that you normally
have as well.
Other Financial Conditions
Even if you decide that you can't earn a better return by investing your extra
money elsewhere and you don't mind a smaller interest deduction, there are other
factors to consider before prepaying your mortgage.
Everyday Expenses. Ensure that you have enough money for your everyday living
expenses. Only money that you have in excess of your living costs should be used
to prepay your mortgage.
Other Debts - If you have other debts at a higher interest rate than your
mortgage such as credit card balances, personal bank loans, and auto loans, you
should pay off the other debts before your mortgage, especially since the
interest on those debts is generally not deductible.
Emergency Fund/Savings - You should have an emergency fund set up before
you prepay your mortgage. If you will have to finance your children's college
education or you are planning to retire soon, you may also want to build up your
savings instead of prepaying your mortgage.
Other Options - You might consider refinancing your mortgage. If you can
secure an interest rate lower than your current mortgage interest rate,
refinancing could save you a substantial amount in interest charges and reduce
your monthly payment.
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| Contact Us |
Cook & Co.
Bara Business Center
124 South Main Street
Arab, Alabama 35016-1351
- Main Tel: 256-586-4111
- Nationwide: 800-551-6253 or 54
- Birmingham (Direct): 322-7452
- Huntsville (Direct): 534-6922
- Fax: 256-586-4138
- Email: info at bara dot net
- Directions:
Map
- Office Directory
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