Do we get mortgage interest back as part of our tax refund after buying first home?

Thanks for the explanation! So essentially unless our total itemized deductions (mortgage interest + property taxes + other eligible items) exceed $29,200, we won't actually see any tax benefit from the mortgage interest? That makes so much more sense now. Our property taxes were about $3,800 and we made maybe $1,000 in charitable donations. So we're nowhere near that standard deduction threshold. Is there anything else major we could itemize that I might be overlooking?

You've got it exactly right! With your mortgage interest ($2500), property taxes ($3800), and charitable donations ($1000), your itemized deductions would total about $7300, which is well below the standard deduction threshold of $29,200 for married filing jointly. Other major items you could potentially itemize include state and local income taxes (though these are capped along with property taxes at $10,000 combined), medical expenses (but only the portion exceeding 7.5% of your AGI), and certain job expenses. However, even with these additions, most newer homeowners with mortgages under $500,000 find themselves better off taking the standard deduction in the current tax environment.

How exactly does this taxr.ai thing work? Does it actually look at your documents or is it just another tax calculator? I'm in a similar situation (bought in November) but my interest is only about $1800 so far.

I'm skeptical about these online tools. Can it really find deductions that TurboTax misses? I thought those big tax software programs were pretty comprehensive with their questionnaires.

It actually reviews your tax documents and mortgage paperwork through their document analysis system. You upload your forms (like your 1098, W-2s, etc.) and it identifies potential deductions or credits specific to your situation. It's more personalized than just a generic calculator. For home office deductions, it helps determine if you qualify and calculates the appropriate amount based on your specific situation - something many people don't realize they're eligible for even when using standard tax software. TurboTax and others do ask questions, but many people don't understand the technical tax language enough to answer correctly, which is where the document analysis really helps.

Wait, you can pay to skip the IRS phone queue? How is that even legal? Sounds like paying for preferential government service which seems sketchy.

Does this actually work? I've been on hold with the IRS for literally 3+ hours multiple times trying to sort out my amended return that includes mortgage interest from a rental property, and I keep getting disconnected. I'm desperate at this point.

It's completely legal because the service doesn't give you preferential treatment from the IRS itself. It just automates the calling process and waits on hold for you, then calls you when an agent is reached. The IRS doesn't know you're using any service - you're just not personally waiting on the phone for hours. It absolutely works. I was skeptical too before trying it. The system keeps calling the IRS using their algorithms to hit the least busy times, navigates the phone tree automatically, then calls your phone when it reaches a human agent. I spent 20 minutes getting my mortgage interest questions answered instead of 3+ hours on hold or getting disconnected. For amended returns with rental property questions like yours, talking to a live agent can definitely help clarify things.

Thanks for this tip! I hadn't thought about keeping good records for future years. Do you recommend any particular way to organize home-related expenses that might eventually become tax deductions? I'm not very organized with this stuff normally.

I keep a simple spreadsheet with home expenses broken into categories: mortgage interest (from your 1098), property taxes, home improvements (with subcategories for energy-efficient upgrades which might qualify for credits), home office expenses if applicable, and maintenance costs. For larger home improvements, save all receipts and contractor information digitally. Take before/after photos too, especially for energy-efficient upgrades like new windows or insulation. I also scan and save all property tax statements and mortgage statements with my year-end tax documents, even if I don't end up itemizing that year. This makes it super easy to review your situation each tax season to see if itemizing would be beneficial yet.

It's not misleading for everyone though. We bought a home in a high-property-tax state (NJ) and our property taxes alone are over $12k yearly. Combined with our mortgage interest of around $15k, we're well over the standard deduction. The benefits really depend on your specific situation and location.

Fair point. I'm in a low-tax state and have a relatively small mortgage, so I guess that's why I'm not seeing benefits. Still frustrating when all the homebuying "advice" acts like tax breaks are guaranteed for everyone! I should move to NJ lol.

This is such a great perspective! I was getting really discouraged about the whole homebuying decision after realizing the tax benefits weren't what I expected, but you're absolutely right about the other advantages. We're definitely building equity instead of throwing rent money away, and our monthly payment is locked in while our friends are dealing with rent increases. I hadn't really thought about the long-term tax potential either - maybe in a few years when we're earning more or have additional deductions, itemizing will actually make sense. Thanks for helping me see the bigger picture beyond just this year's tax disappointment!