Quote:
Originally Posted by geojen
How do you go about figuring out how much you will owe in taxes in any given year? DH and I just bought a home in Feb, and I am trying to figure out how to adjust our withholding to have more take-home pay and less of a refund. But, I'm scared that I'm going to screw it up and owe a ton of money in April.  |
Crudest estimate without redoing prior years taxes:
look at ammortization table. Sum up the interest payments on mortgage for a given year. (Jan-December).
look up taxable income on prior years tax return. Find the tax bracket of the taxable income (15%-25%-28%). 75% of country files in 15% bracket.
Then take the percentage and multiply by the interest paid per year.
Examples:
$10,000 interest paid.
15% tax bracket is $1500 back. ($125/month??)
25% tax bracket is $2500 back (more than $200/month)
28% tax bracket is $2800 back ($200+/month)
If you know (can estimate) property taxes, add that into interest paid. This does not account for state taxes. This also assumes the mortgage interest is higher than the standard deduction.