I was told there is no way we need to itemize, but we had a crazy year and I want to be sure.
We’re married filing jointly, we paid about 31k in mortgage interest on our primary, and hit around 14.5k for state income tax/property tax (I know there’s a cap there). We also gave about 10k to charity this year. Also we have two kids which I think applies either way.
But those three together immediately get us well over the standard deduction, correct?
Also, we do have a rental property, but I believe that mortgage interest is separate and goes against rental income, not itemized deductions.
I’m still trying to learn so if I am misunderstanding how deductions work please kindly correct me!
Posted by BizDolo
4 Comments
You should probably itemize based on these numbers. Just input everything into your tax software and it will choose standard/itemized based on which is better for you.
Yes, you should itemize. You itemize when your itemized deductions exceed your standard deduction. Although with most tax software. You simply input all your tax information then it will choose whichever deduction is higher (but they offer an option to override). Which you normally wouldn’t do outside special circumstances, most common being if filing MFS and one spouse is itemizing the other has to itemize.
You apply your 1098 for your rental property to your Schedule E. Along with real estate taxes if you pay those separately. Plus your other rental related expenses.
Why would there be no way that you need to itemize? Seems like you should definitely be itemizing.
There is a rule with mortgage interest, that applies if the total outstanding mortgage debt is above $750k, then the deduction is limited.
Itemize.