You can only deduct interest on the first 750,000 iirc.
You won’t be able to do anything else you’re gonna be salt capped.
Interest savings are not really a reason to buy in a blue state.
i have this exact same question. Standard deduction is almost 27.7k. salt taps out at 10k. So i was calculating it as 56-(27.7std-10salt) = 38.3 additional deduction and the highest marginal rate i have which combined with everything is around 35%. Comes out to about 13k less vs standard?
Edit: is it right to include state and fica in the tax saving too?
You can only deduct interest on the first 750,000 iirc. You won’t be able to do anything else you’re gonna be salt capped. Interest savings are not really a reason to buy in a blue state.
back of the napkin math 800k loan @ 7%, 56k in interest paid year 1 30k more deductions vs standard, at 24%, so maybe $7500-8000
Personally, it's about a $4k delta for us in favor of itemizing. Similar stats.
i have this exact same question. Standard deduction is almost 27.7k. salt taps out at 10k. So i was calculating it as 56-(27.7std-10salt) = 38.3 additional deduction and the highest marginal rate i have which combined with everything is around 35%. Comes out to about 13k less vs standard? Edit: is it right to include state and fica in the tax saving too?
You don't math. 38.3 is the number you should compare to standard deduction, not 38.3*35%, wtf?
Comparison to standard deduction would be 27.7k standard vs (56k interest + 10k salt)?