Tax Savings Calculator
Calculate combined federal and state tax savings from your depreciation deduction year by year.
How Depreciation Reduces Your Tax Bill
Depreciation creates a non-cash deduction that reduces your taxable rental income. Your tax savings equal the annual depreciation multiplied by your combined marginal tax rate. At a 24% federal rate plus 5% state rate, a $11,636 depreciation deduction saves you $3,374 in taxes every year without spending a dime. Over a 10-year hold, that is $33,740 in cumulative tax savings.
- Annual tax savings = depreciation x combined tax rate
- Federal rates typically range from 22% to 37% marginal bracket
- State rates range from 0% (TX, FL, NV, WY) to 13.3% (CA)
- Higher tax brackets amplify your savings proportionally
Year-by-Year Cumulative Tracking
The calculator generates a complete year-by-year schedule showing your annual tax savings and cumulative total. You can see exactly how much you have saved over any hold period, and the cumulative depreciation taken feeds directly into the recapture exposure calculation so you know your potential tax liability if you sell.
- Track annual and cumulative tax savings over your hold period
- First-year savings are prorated using a simplified half-year split
- Visualize savings growth with interactive charts
- Cumulative depreciation feeds into recapture exposure calculation
Sample Output
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