If I buy an apartment in NYC will I be able to deduct the full mortgage interest (first $750K) and property taxes from my state and local as well as Federal (SALT)?

[Opus 17]

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@DN76 wrote:

Thanks a lot Opus and you're quite right, I confused myself by giving two different property tax figures because I was thinking of the 10K salt max for federal. So, yes, it should've been 25K for mortgage and 12k for property tax. Anyway, thanks a lot for your help, I appreciate it. Is there a simple calculator where you can input these figures and see the tax you'd pay? I have a very simple situation. Just employment income, nothing else. I simply want to see how much different apartments will cost me after state and federal tax deductions on the mortgage interest and property taxes.

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Turbotax has a federal tax estimation program.  I don't know of any official NYS or NYC tax estimator.  An interest search shows several run by third parties, but I can't endorse any of them.

You can also use Turbotax Online (carefully).  Make a new test account with a separate user name and password.  You can enter and then change the facts as needed.  Just be sure that you never try to transmit the test return, and never make changes to your real tax return file.  In most cases, an estimate using the 2021 program will be close to the actual result for 2022, unless Congress comes up with some new last minute tax law changes.  

[domtest]

@Opus 17 I just ran a scenario, whereby I took last year's tax return and amended it by adding an itemized deduction for $30,750 mortgage interest based on an 820K mortgage. When I looked at the breakdown of the deductions being made, it had $28,125 for all deductible interest and $10K for SALT. What I don't understand is I don't think I have 10K worth of SALT deductions. I input zero property tax and I thought SALT was made up of State and local income taxes which on my state tax return come to only $3,739 not 10K. Is this a mistake in the calculation or is the property deduction coming from somewhere other than the mortgage interest and property tax?

This was based on a Federal AGI of $73,920 

Thanks.

[NCperson]

@domtest - assuming you are using the Desktop version of Turbo Tax, go into Forms View and pull up Schedule A.  You are correct that the SALT limitation is property tax and State and Iocal taxes.  You will see the details of what is occuring on Schedule A.  

[domtest]

Thanks but I'm using the online version only.

[Opus 17]

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@domtest wrote:

@Opus 17 I just ran a scenario, whereby I took last year's tax return and amended it by adding an itemized deduction for $30,750 mortgage interest based on an 820K mortgage. When I looked at the breakdown of the deductions being made, it had $28,125 for all deductible interest and $10K for SALT. What I don't understand is I don't think I have 10K worth of SALT deductions. I input zero property tax and I thought SALT was made up of State and local income taxes which on my state tax return come to only $3,739 not 10K. Is this a mistake in the calculation or is the property deduction coming from somewhere other than the mortgage interest and property tax?

This was based on a Federal AGI of $73,920 

Thanks.

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First, you really should not have changed your tax file by amending it.  You can manually undo your changes, but there is no easy way to restore your return to the "As-filed" version. So the amended version is what you will get if you ever need to print your return for a copy or apply for a loan etc.  It's too late to stop you, but not too late for someone else reading this.

Second, it's hard to troubleshoot TT online, since no one can see the internal worksheets, and no one on this board can see your file at all.  You are correct that if you only entered mortgage interest and no taxes, you should not have hit the SALT cap.  But sometimes, the summary Turbotax shows you is not quite what the actual return shows.  If you can, print your return in its present state and look at the details on schedule A.   (You should be able to print the return without filing it, since you already paid to file your original return.  But I have not spent much time with TT online in many years, so I can't point you to the printing instructions.  Look around, or someone else may be able to help, just be very careful not to "file" your return, either by mail or e-file.  You want to print your return to review, not to file.)

Then if schedule A really is incorrect, I would double check your data entry first.  I've never seen TT grab numbers out of thin air before, at least not in this situation.