This worksheet is designed to help estimate the cost of homeownership after all taxes paid and deductions taken. There are few steps involved as listed below to arrive at the estimate. The After-Tax-Cost of Homeownership Worksheet helps you with the calculation.

• The worksheet takes your annual taxable income (i.e. all deductions are taken – itemized or standard) before purchasing a home.
• You enter your State and Federal taxes
• The worksheet re-calculates the taxable income with the addition of home deductions. The re-calculations is done whether the standard deduction is taken or itemized
• Once the new taxable income is calculated, you enter your new taxes based on the new taxable income
  
• The tax savings is divided by 12 and then subtracted from mortgage payments to arrive at After-Tax cost of homeownership.

Factors impacting tax savings of homeownership:

• Standard deduction already provides some tax benefit.
  
• The high income phase out  – itemized deductions are reduced by 0.03% of AGI over $139,500.00. For example, if AGI=$300,000, deductions reduced by (300,000-139,500x.03) $4,815

Click here to access the worksheet!

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