But, if I remember correctly, (assuming that you have the option to choose between the standard vs itemized deductions), then I do not think you could deduct your interest once you choose the standard deductions. I am assuming that the interest deductions are for your own primary residence.
Here is a link to an IRS article about itemized deductions:
You might want to ask your question to a forum for tax professionals or cpas, e.g.
I normally suggest contacting a tax professional 99% of the time when the question relates to taxes; however, your question is quite common for any new Homebuyer and there are many information sources to help arrive at a decision based on â€œthe numbersâ€ only you have knowledge of.
You either have to take the Standard Deduction OR Itemize your deductions and hereâ€™s a few ways to decide:
1) Stick a toe in the "Deductions Pool" before jumping in by reviewing:
"Deciding Whether or Not You Should Itemize Your Deductions"
2) Time to jump in. Start by reviewing these standard and popular IRS Guides:
Tax Info for Homeowners: http://www.irs.gov/pub/irs-pdf/p530.pdf
Home Mortgage Interest Deduction: http://www.irs.gov/pub/irs-pdf/p936.pdf
Schedule A â€“ Itemized Deductions: http://www.irs.gov/pub/irs-pdf/i1040sca.pdf
You might consider reading all of this info is too much work; however, it's nothing compared to what CPAs go through each year (current US tax code hovering around 75,000+ pages!).
Seeing a tax professional is always a smart option; however, as a new Homeowner you should personally and fully understand what can contribute to your itemized deduction amount. Nobody knows better than you where your money is being spent right now and coupling this knowledge with the details the IRS publications provide will allow you to maximize your deductions.
Once you have a firm footing on what can be itemized the calculators below may provide a quick answer on which way to go as well. Recognize you have to understand ALL of the applicable itemized deductions to make the results of the calculator relevant AND I would double check the results!
Best Regards, -Steve
I had heard that the new tax laws put in place with passing prop 30 created retroactive tax burdens that will be effective with your 2012 tax return. I wonder if the citizens who voted for it understood its impact but it is what it is. I'm not sure anyone understands it as well as tax accountants.
If you need a great tax accountant, call Ed Cook at (916) 705-4958.
You will have to speak to a tax expert, no Realtor or Real Estate Agent is qualified to advise you on this. However, from personal experience, I can tell you the tax deductions I applied as a homeowner far beat any "standard" deduction. I even was able to deduct my costs of purchase, like appraisal and inspection fees. That was several years ago, and tax laws always seem to be changing, so check with your tax pro so you get everything coming to you!