Like many relatively young people, my wife and I have the hope of one day owning a house of our very own.  One of the wonderful things that tries to make it more affordable is that mortgage interest is tax deductible each year.  However, figuring out exactly how much money a mortgage interest deduction puts into your pocket is somewhat tricky.  For a long time I heard different formulas for trying to figure it out.  Last week, I got fed up with it, and I sat down with the IRS 1040 instructions and tried to come up with something.

I wrote a small python script to do the work for me.  It’s not perfect, and it might be entirely wrong, but as far as I can tell, it provides a reasonably good estimate of how much money a mortgage interest tax deduction could be worth.

So, to share my work with everyone, I threw this little app together today.  It takes your expected AGI, loan amount, number of payments, interest rate, and tax filing status, and gives you a reasonable idea of what your deduction will be worth.  Again, note that I’m not a CPA and this is provided as a free service without warranty.  Please check with a real CPA before making any major financial decisions.  In the meantime, if you feel like getting an idea of what you can expect, head on over and check it out.  (http://taxsavr.appspot.com)