Gary, you are correct that you are mistaken. Without going into all the gory details, the best way to run scenarios is to take yor tax software from last year and do a run through with some estimates if you were to have owned a house, then you can get real close to what you would have saved. If you don’t have tax software you can borrow 2006 turbo or tax cut or even find it dirt cheap in stores since it is obsolete now.
The big thing you missed was that even when you itemize you still get a deduction per person of 3,300. The standard deduction is not 16,9k it is 10,300k, then you add on 3300 per person but you wont lose that when itemizing. State, local and property taxes are also deductable when you itemize and not so when taking the standard so you probably come close to covering the threshold right there and all your interest would be over the top. Once you begin itemizing you can take a few more things that you weren’t (work expenses, safety deposit box, etc.) that you don’t get to when taking the standard, so it opens the door to other deductions. I didn’t own a house last year for the first time in a long while and my tax software still said it was better to itemize than go standard, so for me I know the entire mort interest will be above the threshold, best advice, run a pretend tax scenario and compare it to your real one. If you have this simple of a tax situation and you pay someone to do your taxes for you, stop doing that and do your own while it’s simple just for the education. save the receipt for the software, it’s deductable as well.
Thanks temeculaguy. I guess I should have known that. I used turbotax online last year and was looking at the printout that listed a 16,900 deduction so I assumed it was standard for joint filed taxes. I guess I didn’t know there is a 3300 per person deduction when itemizing as I never had enough items to deduct to make it worthwhile. It may be hard to believe that I’ve never understood this, but then again I’ve filed the EZ form my whole life and tried to not worry much about the tax code.
I’m in the military and currently a resident of a state without an income tax so I can’t deduct taxes I don’t pay. If I understand you right, there is still $10,300 I would need to make up with other deductions. So with the exception of the property tax deduction I think my line of thinking still has some merit. The property tax deduction only gets me a few thousand closer. I still think I would need about 8K in other deductions to start “saving” by itemizing.
Thanks temeculaguy. I guess I should have known that. I used turbotax online last year and was looking at the printout that listed a 16,900 deduction so I assumed it was standard for joint filed taxes. I guess I didn’t know there is a 3300 per person deduction when itemizing as I never had enough items to deduct to make it worthwhile. It may be hard to believe that I’ve never understood this, but then again I’ve filed the EZ form my whole life and tried to not worry much about the tax code.
I’m in the military and currently a resident of a state without an income tax so I can’t deduct taxes I don’t pay. If I understand you right, there is still $10,300 I would need to make up with other deductions. So with the exception of the property tax deduction I think my line of thinking still has some merit. The property tax deduction only gets me a few thousand closer. I still think I would need about 8K in other deductions to start “saving” by itemizing.
