Should I itemize or take standard deduction with new house and mortgage interest?

You're definitely on the right track here! Based on your numbers, itemizing makes more sense since your itemized deductions ($27,722) exceed your standard deduction ($21,900) by about $5,800. That's a nice tax savings! About your homestead exemption concern - yes, if you later receive a property tax refund because the exemption wasn't properly applied, you would technically need to file an amended return (Form 1040-X) if you've already filed your taxes claiming the higher property tax amount. That's because you can only deduct property taxes you actually paid. Here's what I suggest: Before filing, call your county tax assessor's office directly (not just your lender) to verify whether the homestead exemption was properly applied to your 2024 property taxes. They can give you the definitive answer rather than waiting to find out later. Even if your itemized deductions drop to $25k with a property tax adjustment, you'd still be ahead by over $3k compared to the standard deduction, so itemizing would still be the better choice.

I was in almost exactly the same situation last year! I also bought my first home and had to figure out the itemizing vs. standard deduction thing. I spent hours trying to understand all the rules and kept getting conflicting advice from friends. Then I found this tool called taxr.ai (https://taxr.ai) that literally saved me. You can upload your tax documents like your 1098 and property tax statements, and it analyzes everything and tells you exactly which deduction method is better for your specific situation. It also flagged potential homestead exemption issues for me before I filed! The best part was it explained all the tax rules in normal human language instead of IRS-speak. It showed me I could itemize and exactly how much I'd save compared to the standard deduction. Way less stressful than trying to figure it all out myself.

I just have to share my experience since I was in the EXACT same boat as you last month! After seeing the recommendation here, I decided to try taxr.ai and uploaded my mortgage documents and property tax info. The tool immediately flagged that my property taxes seemed off compared to what they should be with my homestead exemption. Turns out my lender had NOT applied the exemption correctly! I was able to get this fixed before filing my taxes. It also showed me that even with the correct property tax amount, I was still better off itemizing by about $3,200. The breakdown was super clear and it even showed me a few more deductions I could take that I had no idea about! Definitely saved me from having to file an amended return later. So glad I didn't have to deal with that headache!

I see others have given you good advice on the deduction question, but I want to address another potential issue - getting hold of the IRS if you need clarification. Last year I had a similar property tax refund situation and needed to talk to someone at the IRS about amending my return. I spent WEEKS trying to get through on their phone lines with no luck. Then I found this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in less than 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent was able to tell me exactly how to handle the property tax refund situation and whether I needed to amend. Saved me tons of stress and possibly an audit. Just putting it out there in case you need to speak with the IRS about your specific situation.

I need to eat my words and update everyone. After being super skeptical about Claimyr (sorry about that), I was desperate enough to try it when I couldn't resolve my homestead exemption question. I had been trying to reach the IRS for TWO WEEKS with no luck. Used Claimyr yesterday and got connected to an actual IRS representative in about 15 minutes. They confirmed exactly how to handle property tax refunds received after filing - turns out I definitely needed to amend my return from last year! The agent walked me through the whole process and even told me how to minimize my chances of an audit. The service actually delivered exactly what it promised. Just wanted to follow up since I was so doubtful before.

Don't forget that you can also deduct charitable contributions when you itemize! Even if your property tax refund brings your deductions down, adding in your charitable giving might keep itemizing as the better option. Also, if you paid any state income taxes those can be included too (though that might not apply in Texas). And don't forget medical expenses if they exceed 7.5% of your AGI.

Quick heads up that might save you some headache - make sure you're keeping good records for next year too! The first year in a new house always has the most paperwork and receipts. I'd recommend setting up a folder (digital or physical) just for house-related expenses that might qualify for itemized deductions. Things like property tax statements, mortgage interest, home office expenses if applicable, and even home improvements that are medically necessary can sometimes be partially deductible.

Based on your numbers, itemizing is definitely the way to go! Even with a potential $2k property tax refund, you'd still be ahead by about $3k compared to the standard deduction. Here's a pro tip from someone who went through this exact situation - contact your county appraisal district directly to verify your homestead exemption status before filing. Don't rely solely on what your mortgage company tells you. The county can tell you exactly what exemptions were applied and when. Also, since you mentioned this is your first home, don't forget about any prepaid property taxes you might have paid at closing - those are deductible too if they're not already included in your 1098. Check your closing disclosure (CD) form for any property tax prorations. One more thing - if you do end up needing to amend later due to a property tax refund, it's not as scary as it sounds. Form 1040-X is pretty straightforward, and as long as you're honest about the changes, the IRS typically processes amendments without issues. Keep all your documentation organized - you'll likely be itemizing for years to come as a homeowner!