# Is this how you calculate how much you can deduct from itemized deduction for mortgage interest and property tax?

Say you have a following case.

• Married, filing jointly
• Home value: 1,000,000
• Down payment: 250,000
• Debt: 750,000
• 4%, 30 year loan
• Property tax: 8000 / year

Using https://www.mortgagecalculator.org/, I got 22,369 for year 1 of interest payment (~29000 for year 2 and onwards).

1. Does this mean I can have deduction of 22,369 + 8000 = \$32,369 from mortgage interest and property tax?

2. Since \$32,369 is greater than the standard deduction amount \$25,900 for couple in 2022, going with itemized deduction is superior?

Thank you.

• \$22,369 is the interest for just the first 9 months. The first 12 months is actually \$29,759.60. Year 2 is \$29,221.50.
– MTA
Apr 18, 2022 at 15:54
• 22,369 + 8000 == \$30,369, not \$32,369. Apr 19, 2022 at 21:12
• Thanks for the correction
– J K
Apr 20, 2022 at 22:03

Does this mean I can have deduction of 22,369 + 8000 = \$32,369 from mortgage interest and property tax?

Yes you math is correct.

Since \$32,369 is greater than the standard deduction amount \$25,900 for couple in 2022, going with itemized deduction is superior?

It is that simple. If the itemized deduction exceed the standard deduction then use the itemized deductions.

• You are speaking about 2022. I am assuming that you are talking about a future transaction. The lender will be giving you a 1098 showing how much in interest you paid. If you escrow account for property tax through them, they will also tell you how much in property tax payments came out of the escrow account.

• Because it is the first year you may find that some of the interest you paid or the property tax you paid is listed on the settlement documents. Make sure you don't double count this, and also make sure you don't forget to count this.

• If you paid points for the mortgage that can also be deducted. They may also appear on the 1098.

• Once you know you will be itemizing don't forget a couple of other things. You can deduct up to \$10,000 in state and local taxes. Property tax is part of that, but so is your state income tax. So if your state taxes income don't forget to include enough of that to hit \$10,000.

• When you itemize you can also include any charitable deductions you make. Don't forget to include those.

• The part of car registration that is based on car value is also deductible. Apr 18, 2022 at 15:32
• One extra thing you might mention - first year, in some states, you don't pay any property taxes. (For example, I sold my house in January. Tax due in CY 2022 was for TY 2021 - and so I prepaid all of the taxes for 2021 in the settlement - plus a small amount of 2022's tax. So that buyer has no property tax due during all of 2022 that they actually pay. [Technically I hand them the money and they hand it over, but it's not their money.]) This was in IL, other states will vary.
– Joe
Apr 18, 2022 at 21:35
• Not sure about "22,369 + 8000 = \$32,369". "Yes you math is correct." Apr 19, 2022 at 17:15
• @danak Only in some states. Apr 19, 2022 at 20:12
1. Yes. The exact amount of mortgage interest you paid will be reported to you on form 1098 at the end of the year.
2. Yes.

You should use the values you get from your bank on form 1098 and from your county for the property tax which is proportional per value (as opposed to fixed amount per parcel which is non-deductible), but as a general rule of thumb yes. That's the math.