Is there a formula to use when comparing my potential tax savings from deductions related to homeownership and my standard deduction?

I am considering purchasing a newly constructed home and will be filing Schedule A for the first time. Is there a simple formula for me to use when comparing my potential tax savings from deductions related to the house that my builder tells me to expect and my standard deduction?

Scott, this is easy as pie. Remember that the itemized deductions do not reduce your tax bill dollar for dollar. (If they did, they would be called credits.) They are referred to as "above-the-line" deductions. For every dollar that you can deduct, you've lowered your taxable income.

The easiest thing to do is to eyeball your tax from last year. For example, if you made $100,000 and paid $30,000 to the federal government and another $15,000 to the state, figure that your tax rate is about 45%. Thus, if your builder tells you that you'll be able to deduct about $15,000 a year for your home, your tax savings will be about $6,750 ($15,000 × 0.45.) Do the same thing with your standard deduction and you're set.