Home Mortgage Interest and Property Tax Deduction

The calculator on this page helps you estimate the annual mortgage interest and property tax deductions for a home based on its purchase price, loan terms, and property tax rate. By providing some basic details from your previous year’s tax returns, the calculator on this page will also help you see how these deductions affect your taxable income and lower your tax payments. (Learn more)

Federal tax benefits are a big part of making homeownership affordable. Once you own your home, you can take advantage of these benefits by deducting both the Interest  portion of your monthly mortgage payment  and the property taxes that are paid to the county each year from your taxable income. These deductions lower your Federal Taxable Income which directly results in a lower Federal Tax Payment. You will see the benefit of your federal tax deductions by updating the W4 you have on file with your employer.

 


2011 Tax Filing Status:
2011 Taxable Income:
$    
   


THIS SUMMARY PROVIDES ESTIMATES ONLY . Before making any home or loan purchase decision, you should obtain the advice of a professional financial advisor who is aware of your individual circumstances. Please refer to the Terms Of Use  for a complete description of the proper use of this information.

Understanding Your Results
 

Estimated Annual Federal Tax Deduction: Federal tax deductions are payments that you make throughout the year that can lower the taxable income that you report when you file taxes online  or on a tangible form at the end of the year. In the US, the Mortgage Interest and Property Tax payments that a homeowner makes throughout the year are tax deductible. The Estimated Annual Federal Tax Deduction shown here is the estimated Mortgage Interest and Property Tax payments that you will make in the first year of owning your home. This deduction amount is based on the home purchase price, loan interest rate, and property tax rate that you have provided. The table below shows your estimated Mortgage Interest and Property Tax deductions.

Estimated Annual Federal Tax Deductions  
Mortgage Interest Deduction   $11,732.21  
Property Tax Deduction   $2,995.32  
Estimated Annual Federal Tax Deductions   $14,727.53  
 

Federal Taxable Income After Deductions: Assuming that there are no changes to the income that you earn this year as compared to last year, this value is an estimate of the new federal taxable income that you will report on your taxes this year. The table below shows that your Federal Taxable Income After Deductions is equal to the federal taxable income from your prior year taxes minus the estimated Mortgage Interest and Property Tax deductions from your new home.

Estimated Federal Taxable Income  
Federal Taxable Income Before Deductions   $60,000.00  
Estimated Annual Federal Tax Deduction   $-14,727  
Estimated Federal Taxable Income After Deductions   $45,272.00  
 

Estimated Annual Federal Tax Savings: Because the Mortgage Interest and Property Tax payments that you make on your home this year will reduce your Federal Taxable Income from last year, your Federal Tax Payment will also decrease from last year. This calculator estimates the new Federal Tax Payment for your Federal Taxable Income After Deductions. The table below shows that your Estimated Annual Federal Tax Savings is the difference between this new estimated Federal Tax Payment and the Federal Tax Payment that you made last year.

Estimated Annual Federal Tax Savings  
Estimated Annual Federal Tax Payment on Income Before Deductions   $3,385.00  
Estimated Annual Federal Tax Payment on Income After Deductions   $2,018.00  
Estimated Annual Federal Tax Savings   $1,367.04  

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