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Level 3
posted Apr 17, 2022 3:52:43 PM

Why my Federal refund is not increasing when I entered more deduction (mortgage + property tax)?

I have about $6k mortgage and $5k property tax, but my federal tax refund remains the same as I only entered $6k mortgage first.  It seems that $5k property tax is not considered?? 

(sorry I forgot to mention, that I used itemised deduction, that also allows for higher amount to be deducted, right?!)

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1 Best answer
Level 15
Apr 19, 2022 10:48:01 AM

Also...

 

1).The added property taxes won't do anything if your state income taxes paid/withheld during 2021 have already exceeded $10,000.  That deduction is capped.

 

2) if you are already getting all your Fed withholding back as a refund (or quarterly estimates paid) from your Federal taxes ...then you don't get any more.....and a gazillion $$ of added itemized deductions won't do anything.  (also for the Self-employed....it doesn't reduce SS and Medicare taxes due on your SE gains)

 

6 Replies
Level 15
Apr 17, 2022 4:05:49 PM

Mortgage interest and property taxes are itemized deductions.  The total of All your itemized deductions must be greater than the Standard Deduction for your filing status to have any tax benefit.

 

Standard deductions for 2021

  • Single - $12,550 add $1,700 if age 65 or older
  • Married Filing Separately - $12,550 add $1,350 if age 65 or older
  • Married Filing Jointly - $25,100 add $1,350 for each spouse age 65 or older
  • Head of Household - $18,800 add $1,700 if age 65 or older

Expert Alumni
Apr 17, 2022 4:10:18 PM

It depends. You will only see an effect on your refund amount if your itemized deductions are  greater than standard deduction. For example, the standard deduction for a single filer is $12,550. This means that your itemized deductions need to be greater then $12,550 for it to have any effect on your refund. 

Level 3
Apr 17, 2022 4:12:22 PM

Sorry, I forgot to say.  I used itemised deduction.

Level 3
Apr 19, 2022 10:37:53 AM

@AamilD would you please help?  Many thanks!

Level 15
Apr 19, 2022 10:48:01 AM

Also...

 

1).The added property taxes won't do anything if your state income taxes paid/withheld during 2021 have already exceeded $10,000.  That deduction is capped.

 

2) if you are already getting all your Fed withholding back as a refund (or quarterly estimates paid) from your Federal taxes ...then you don't get any more.....and a gazillion $$ of added itemized deductions won't do anything.  (also for the Self-employed....it doesn't reduce SS and Medicare taxes due on your SE gains)

 

Level 3
Apr 19, 2022 5:16:18 PM

@SteamTrain 

Thank you so much for explaining these scenarios!!  I never thought State tax would impact on Fed when I only worked on Fed tax return (thus not starting State tax return yet) -- this is really good to know.  My state tax withholding does exceed $10,000.  I guess Case 2 may be rare? (to get all the Fed withholding back as a refund)