When you say you’re in the 25% bracket, are you combining fed and state? If so, that seems a little low (so your tax benefit would be higher), but I really only know my own tax bracket and it sucks.
25% is probably the federal tax bracket. For a single person with $7000 state tax, 28% may be more appropriate. In 2008, you get into 28% bracket starting at $79k taxable income (after deductions and exemptions).
Is mortgage interest also deductible for state tax purposes? If so, that’s 9% off your tax bill.
