@DN76 wrote:
Thanks. The thing is I'm trying to calculate how much money I'd get back from my property tax and mortgage interest were I to buy a co-op. Is there a way to calculate that?
Say for example my annual mortgage interest were $25K and my property taxes were $12K.
I think I can figure out what happens with my Federal due to the $10K maximum from SALT and my 22% rate income. But how would I calculate my state and local deductions and how much I would get back?
At the federal level, your total deduction for state income tax, city income tax, and property tax, is capped at $10,000. If you can afford a $750K apartment, you are probably close to that already, so you won't get much added deduction from the apartment property taxes. Deducting $25K of mortgage interest would reduce your federal income tax by $5,500, if you are in the 22% tax bracket.
On your state income tax return, adding $12K of property taxes and $25K of mortgage interest would reduce your state income tax by $2500-$3500, depending on your income and tax bracket, and would reduce your city tax by about $1400. This assumes that your total itemized deductions are already larger than the standard deduction.
The NYS standard deduction is $8000 single and $16,050 for married filing jointly. If your itemized deductions are less than that, that will reduce the tax savings of your new apartment. Only the amount over the standard deduction will result in a tax savings (7-10% state income tax and 4% city income tax).
