Standard deduction vs itemized deduction with mortgage interest - tax software says don't itemize?
I purchased my first home last year and was excited about finally being able to deduct the mortgage interest on my taxes. Now I'm using tax software to file and feeling really confused. I entered all our W-2s and the 1098 forms from our mortgage lender, but the software is still recommending we take the standard deduction rather than itemizing. We paid about $12,000 in mortgage interest in 2024, but it seems like we're getting zero tax benefit from this. Does this sound right or is the tax software missing something? I was counting on those deductions to help offset some of our costs. I'm wondering if I need to manually override the software recommendation or if there's something else I should be entering. Let me know if you need any additional information about our situation to help figure this out.
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Brandon Parker
This is actually completely normal and happens to a lot of first-time homebuyers! The tax software is likely giving you the correct recommendation. Here's why: For 2024 taxes (filed in 2025), the standard deduction for married filing jointly is $29,200. For single filers, it's $14,600. Your itemized deductions would need to exceed these amounts to be worth itemizing. Your mortgage interest is $12,000, which is a good chunk, but you'd need other significant deductions like state/local taxes (capped at $10,000), charitable contributions, and medical expenses (above 7.5% of your AGI) to exceed the standard deduction threshold. Many homeowners are surprised by this because before the Tax Cuts and Jobs Act of 2017, the standard deduction was much lower, so more people benefited from itemizing mortgage interest. The higher standard deduction means fewer people itemize now.
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Chloe Zhang
•Thanks for explaining! I had no idea the standard deduction was so high for married couples. We have some charitable donations and property taxes too, but I guess they still don't add up enough. Would it be worth looking into other potential deductions, or should I just accept the standard is better for us?
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Brandon Parker
•The standard deduction is definitely substantial for married couples, which is why many homeowners find themselves in your situation. It's always worth checking if you have other potential deductions that could push you over the threshold. Common ones include substantial charitable donations, significant medical expenses, or other mortgage-related expenses like points paid when obtaining your mortgage. That said, if your tax software has already calculated everything correctly, it's probably giving you the right recommendation. The standard deduction is designed to simplify tax filing, and there's nothing wrong with taking it - it means you're getting a good tax benefit regardless of your homeownership status.
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Adriana Cohn
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Jace Caspullo
•Does taxr.ai work with all the common tax software programs? I'm using H&R Block online and wondering if I can just upload my documents there or if I need to start over somewhere else.
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Melody Miles
•I'm skeptical about using yet another tax tool. How does it actually find deductions that established software like TurboTax or H&R Block would miss? Those companies have been doing this for decades.
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Adriana Cohn
•It works alongside whatever tax software you're already using - you don't need to switch or start over. You simply upload your documents to taxr.ai for analysis, and it gives you recommendations you can then enter into your existing tax software. It's meant to complement rather than replace your current setup. The difference is in how it analyzes documents. While TurboTax and others are great at processing the information you manually enter, taxr.ai specifically scans your actual documents using AI to identify items you might have overlooked or miscategorized. It's caught things like business expenses on credit card statements that I didn't realize were deductible.
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Jace Caspullo
Just wanted to follow up that I tried taxr.ai after asking about it here. It was actually super helpful! I uploaded my mortgage docs and a bunch of receipts I had, and it found nearly $3,000 in deductions I'd missed. In my case, it discovered some home office deductions that applied to my situation that I had no idea about. Still taking the standard deduction, but now I understand exactly why and what the threshold would be to make itemizing worth it.
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Nathaniel Mikhaylov
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Eva St. Cyr
•Wait, is this legit? I've tried calling the IRS before and gave up after being on hold for 2+ hours. How does this service actually get you through faster?
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Melody Miles
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Melody Miles
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Kristian Bishop
This is one of those situations where you need to run the actual numbers. Here's what I do every year: 1. Calculate all possible itemized deductions (mortgage interest, property tax, charitable donations, etc.) 2. Compare total to standard deduction 3. Take whichever is higher For most married couples, you need well over $29k in itemized deductions to benefit. Singles need over $14.6k. The tax software is probably right, but double-check your inputs to be sure you haven't missed anything substantial.
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Kaitlyn Otto
•Do you know if home improvements count toward this at all? We did a kitchen renovation last year and spent quite a bit. Would any of that be deductible with the house?
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Kristian Bishop
•Home improvements generally don't count as deductions in the year you make them. They get added to your "basis" in the home, which can reduce potential capital gains tax when you eventually sell the house. So while they don't help you this tax year, keep good records because they might save you money years down the road when you sell. The exception would be if any of your improvements were for medical purposes (like installing a wheelchair ramp) or for energy efficiency that qualifies for specific tax credits (like solar panels). Those have separate tax benefits outside of itemizing deductions.
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Axel Far
Has anyone considered making extra charitable donations in alternate years to make itemizing worthwhile? My tax guy suggested we "bunch" our charitable giving - donate twice as much every other year so we can itemize in those years, then take standard deduction in the off years. Seems like a clever approach if you're right on the borderline.
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Jasmine Hernandez
•That's actually a really smart strategy! My wife and I started doing this last year. We contribute to a donor-advised fund in the years we itemize, then distribute from the fund to charities during our standard deduction years. Works especially well if you're close to the threshold.
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Nalani Liu
This is such a common misconception! The mortgage interest deduction isn't automatically better than the standard deduction - it only helps if your total itemized deductions exceed the standard deduction threshold. Think of it this way: you're already getting a $29,200 deduction (if married filing jointly) without having to track any receipts or meet any requirements. Your $12,000 in mortgage interest would need to be combined with at least $17,200+ in other itemized deductions (state/local taxes, charitable donations, medical expenses over 7.5% of AGI) to beat that. The "tax benefit" you're getting is actually the standard deduction itself - it's just not tied to your mortgage. Don't feel like you're missing out on anything. The current tax system is designed so most people get a substantial deduction regardless of homeownership status. If you're really close to the threshold, double-check that you've entered all possible deductions like property taxes, PMI (if applicable), and any charitable contributions. But if the software says standard is better, it probably is!
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Bruno Simmons
•This is such a helpful explanation! I'm a new homeowner too and had the exact same confusion. I kept thinking "why did I buy a house if I can't even deduct the mortgage interest?" But you're right - I'm still getting that $14,600 standard deduction as a single filer, which is actually pretty substantial. It just took me a while to wrap my head around the idea that the tax benefit isn't necessarily tied to homeownership anymore. Thanks for breaking it down so clearly!
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