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I Told My Accountant He’s A Jackass

That’s the tantalizing memo line in an e-mail from a former client of mine, who thought I’d appreciate what she said to her accountant when he suggested she take out a new mortgage, now that she is about 23 years into paying off a 30 year mortgage.

Many accountants seek to maximize their clients’ tax refunds (or minimize their liabilities) by encouraging mortgage payments that are interest heavy and principal light.  My knee jerk reaction to this is always the same. I question why a person would welcome a reduction of his or her tax liability that is substantially less than the yearly outlay to the bank (for example, why send your lender $12,000 a year in principal so you can get a tax deduction of maybe $4,000-5,000).  And yet accountants urge clients to take on 15 or 30 years of additional debt just so April 15th doesn’t seem like such a burdensome day.

I thought maybe, just maybe, this kind of debt-enthusiasm might be tamped down in light of the mountains of debt we are in as a nation of borrowers.  But apparently there is still at least one accountant remaining who, when spotting a client tantalizingly close to owning her house free and clear, still reflexively urges shouldering extra debt.  Thankfully, there is still at least one woman who knows enough to break out the garlic and a cross!

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