![]() First, we’ll ask users to input their income, average tax rate, and other federal tax deduction items (charitable giving, etc), and whether they are married. We’ll work on both of these problems together, with some simplifying assumptions. ![]() This makes it more likely people end up just taking the standard deduction, which means the property tax deduction is not used, or could make the part of the mortgage interest that is under the $24k cap not useful. The standard deduction is much higher: $24k for a married couple for 2019 versus $12,700 in 2017. The value of the property tax deduction is likely lower due to the cap on state, local, and property tax deductions at $10k.ģ. If so, the tax benefit is limited to deducting interest on the $750k.Ģ. ![]() We adjust the formula for the tax benefit of the mortgage interest deduction to include an if statement that checks if the mortgage balance is above $750k. Mortgage interest is now only deductible for the first $750k. Major changes to the spreadsheet include:ġ. First, a quick review of how the original sheet worked: we had taken the main costs and benefits of home ownership as inputs and calculated what IRR you effectively were earning on your down payment: ![]() ![]() rent spreadsheet post, given changes in the economics of housing due to the Tax Cuts and Jobs Act from late 2017. This post will be a quick update to our original buy vs. ![]()
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