Me and my wife bought a house earlier last September. Our mortage loan is about $400k at an interest of 6.125% with no PMI, and our property taxes are about $5k per year. Also, we paid about $4k in points. Our state income tax is 5% and total household income of about $170k. Given this, I believe there is no point in us filing the 2025 tax return itemizing, because we won't be able to go above the ~$31k standard deduction. We only owned the house 4 months (1/3) of the year so the itemizations come out as :
– Mortage: (392k*0.06125+5k)*0.33 + 4k
– SALT: 170k*0.05
So it only amounts to $22k. We didn't do any donations, so I just wanted to confirm if my math makes sense and there really is no point in itemizing. Am I missing something important?
Confirming no point about itemized filing in 2025 for new homeowners
byu/Motor_Fee7299 intax
Posted by Motor_Fee7299
4 Comments
I agree, it appears that you will not benefit by itemizing deductions this year.
Since you cannot deduct the points this year, you can deduct them prorated for each year of the lifetime of the loan. Assuming it is a 30 year loan, you can deduct $4000/30 each year.
Just input everything into the tax software, and it will tell you whether to itemize or not. Buying that late in the year, probably not, but see how it shakes out with the increased SALT cap.
Freetaxusa you can input all the info and pick both itemized and standard and it will show you both super easily to make a decision.
You are correct but you should still complete those sections of whatever tax prep program you will be using because there may be some state tax benefits from these expenses.