Not getting cash back from Mortgage or Contributions on Fed Return

[PATM1957]

Hi,

this is my first year of collecting Social Security benefits, around $21,000 and around $9000 W-2 Wages. I don't understand why my mortgage interest I paid of almost $10,000 did not cause me to receive a deduction. TT says I get a deduction yet the amounts I get back don't change. Same thing happens when I put in my Charitable contributions? In the past I always got a tax break on my mortgage interest.

Any suggestions?

[xmasbaby0]

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 tax laws that have been in effect since 2018, some deductions have been capped—there is a $10,000 limit to the itemized deductions for state, local, property and sales taxes.

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 2024 Form 1040.

2024 STANDARD DEDUCTION AMOUNTS

SINGLE $14,600    (65 or older/legally blind + $1950)

MARRIED FILING SEPARATELY            $14,600    (65 or older/legally blind + $1550)

MARRIED FILING JOINTLY $29,200    (65 or older/legally blind + $1550)

HEAD OF HOUSEHOLD $21,900    (65 or older/legally blind + $1950)

[NCperson]

@PATM1957 simple explanation: 

You automatically get $14,600* of deductions (called the 'standard deduction').  Everyone gets that.  

the IRS lets you deduct more if you have more expenses of specific types.  Since your mortgage interest is less than $14,600, you just get the $14,600.

90% of taxpayers now take the standard deduction and that has been the case since the 2017 tax law changes. 

* I assume you are filing SINGLE and are under 65 years old. 

[xmasbaby0]

And...no matter how much you enter in itemized deductions you will not get back more than the amount of tax that was withheld from your income (unless you are eligible for any refundable credits).    What is in box 2 of your W-2?  Did you have tax withheld from the SS?   Are you getting a refund of the tax withheld?

[NCperson]

@PATM1957  - because your tax liability is zero, no matter how high your itemized deductions, you could only receive a) a refund of anything withheld in your paycheck or b) by social security plus c) money from the earned income credit.  You would have to be under 65 years old to be eligible for the earned income credit.