My total income for last year was just over $61K. My interest last year was $4534.00 What amount of interest for my home loan, if any, is deductible?

[Fatbottomboy]

At what point is interest on a mortgage deductible?

[xmasbaby0]

Are you making the common mistake of just adding up all the amounts for your itemized deductions without considering the caps and thresholds that must be met?

STANDARD DEDUCTION

Many taxpayers are surprised because their itemized deductions are not having the same effect as they did on past tax returns.  The new higher standard deduction and the elimination of certain deductions, as well as the cap on state and local taxes have had a major impact since the new tax laws went into effect beginning with 2018 returns.

Your itemized deductions have to be more than your standard deduction before you will see a change in your tax owed or tax refund.  The deductions you enter do not necessarily count “dollar for dollar;” many of them are subject to meeting  tough thresholds—medical expenses, for example, must meet a threshold that is pretty hard to reach. (Only the amount that is MORE than 7.5% of your AGI counts)   The software program uses all the IRS rules that apply to the expenses you enter, and it tells you if you have enough to use your itemized deductions or if using the standard deduction is more advantageous for you.  Under the new tax laws, some deductions have been capped—there is a $10,000 limit to the itemized deductions for state, local, property and sales taxes.

Your standard deduction lowers your taxable income. The standard deduction makes some of your income “tax free.”  It is not a refund.  You will see your standard or itemized deduction amount on line 12 of your 2023 Form 1040.

2023 STANDARD DEDUCTION AMOUNTS

SINGLE $13,850  (65 or older/legally blind + $1850)

MARRIED FILING SEPARATELY $13,850  (65 or older/legally blind + $1500)

MARRIED FILING JOINTLY $27,700  (65+/legally blind) )  + $1500 per spouse

HEAD OF HOUSEHOLD  $20,800 (65 or older/blind)  + $1850)

[xmasbaby0]

Go to Federal> Deductions and Credits> Your Home to enter mortgage interest, property taxes, and loan origination fees (“points”) that you paid in 2023.  You should have a 1098 from your mortgage lender that shows this information.  Lenders send these in January/early February.

https://ttlc.intuit.com/questions/2926910-why-didn-t-my-refund-change-when-i-entered-my-mortgage-int...

[Opus 17]

It's always deductible, the question is should you?  If you are single, you are entitled to a standard deduction of $14,600 for 2024.  You will want to itemize your deductions (list them specifically instead of taking the standard amount) only if your itemized deductions total more than your standard deduction.

Itemized deductions include mortgage interest and property taxes, state and local income tax or sales tax, gifts to charity, and medical expenses over a certain threshold.   Suppose your taxes, interest and gifts to charity are $10,000.  They are technically deductible, but you won't actually see an increased tax benefit because the standard deduction is larger.  Or, suppose your taxes and gifts to charity are $11,000, and when you add the mortgage interest, it adds up to $15,534.  You will use the itemized deduction on your tax return, but the extra benefit of the mortgage is only $934, because that is the amount that you are over the standard deduction.

Turbotax will handle this automatically for you, as long as you list all your possible itemized deductions, Turbotax will figure out which treatment is best for your situation.