I have about $2400 in credit card debt (around 13%) and $3000 in student loans (6.7%). My bonus will be $7500-8000. I make about $112,000 per year including this bonus, and I have been claiming 1 on my taxes. I think I will need to pay a little bit this year but not sure how much. I was going to allocate most of the bonus to my 401k to bring up my contributions to $18,000 for the year. If I do not contribute the bonus to my 401k, I will have contributed about $12000 for the year.
If I take the bonus in cash, I will only receive about $4000-5000 (due to state and local taxes) and I doubt I'd get much back at tax time because I have been claiming 1. I can use that to pay the cc and student loan. I will have remaining debt at 0% ($7,500), at 2.5% ($13,000) and at 3.5% ($16,000). I expect to receive an inheritance of about $18,000 in February or March, to be use to pay the rest of my student loan or invest.
Thanks for your input.