In calculating the tax savings from mortgage interest, you must use your marginal tax rate or average tax rate
The rapid calulators TurboTax and HR Block seem to use the average tax rate to determine the tax savings. Our average tax rate was 15% this year. Most other calculators designed specifically for calculating mortgage interest savings tax use marginal tax rate, which for us is 25%. What is supposed to we will use to precisely estimate our tax savings? We are thinking of buying a house and this weighs heavily on our decision process.
Calculate your taxes with a house and then add the home and see how much changes. If you receive the standard deduction for couples is more than 10,000 so that part's no savings. When you have a house that have property taxes and interest then deduct their state income or sales tax and charity is deductible. If you do not doing charity and pay $ 3,000 for property tax only the interest for about 6K reduce your taxes, you reduce your marginal rate so you'll save 25% of 6K or perhaps a 1500 2000 if you have high state taxes.
How to make a Fixed Rate Loan/Mortgage Calculator in Excel
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