How do you calculate zakat step by step?

Pick a date you can justify and keep to it. Many people use the first of Ramadan because it is memorable and giving is easier to arrange then. If you know roughly when you first crossed nisab, use that. Scholars are far more concerned that you calculate consistently every lunar year than that you identify the exact original day. What you should avoid is calculating whenever you happen to remember, because that either shortens or lengthens the year and distorts the amount.

No, and this is a common and costly misunderstanding. Deducting the full outstanding balance of a long-term loan would eliminate zakat for most homeowners permanently, which is not the intent of the obligation. The widely held position is that you deduct only the instalments currently due, or at most those falling due within the coming year. Short-term debts that are actually payable now - overdue bills, this month's rent, supplier payments - are deducted in full.

The lunar year is about eleven days shorter than the solar year, so calculating on a fixed Gregorian date slowly drifts and eventually skips or duplicates a zakat year. Over a lifetime this adds up to roughly one missed year every thirty-three years. Using a lunar date keeps the obligation aligned. If you find lunar dates difficult to track, some scholars permit using a solar year with a slightly higher rate of 2.577% to compensate for the extra days.