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Returning Member
posted Mar 23, 2021 10:32:18 PM

Why deductions show less than what I entered under "you're allowed"

Hi,

 

I am using Deluxe CD/Download software. After entering all info, my deductions shows that I am only allowed much less than what I entered. Software chose itemized deductions as best for me. Please see screenshot.

 

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1 Replies
Expert Alumni
Mar 25, 2021 5:30:19 PM

For the state taxes, if you add the amount allowed for real estate taxes, state and local taxes and vehicle registration fees you will find the total is $10,000, which is the total amount you can deduct on your federal tax return for taxes.

 

The mortgage interest deduction would be limited based on how much your mortgage balance is. If it is over $750,000, the deduction may be limited.

 

Also, if you rent out a portion of your house or have a home office in it, then a portion of your mortgage interest may be used for that, thus reducing the amount deductible as an itemized deduction.