Good question. The federal tax law changes at the end of 2017 limited the amount of mortgage interest you could deduct on your federal return. While the full details are in IRS publication 936 (https://www.irs.gov/publications/p936), the gist is that only the mortgage interest on the first $750K or $1MM of the loan is a federal itemized deduction. The good news for us CA residents is that CA allows _all_ the mortgage interest to be a CA itemized deduction. Furthermore, it may very well be to your benefit to itemize on your CA 540 even if you take the standard deduction on your IRS 1040. (That's what I'm doing this year.) Note: PMI is not a deduction on 2018 Fed or CA income tax.
