Question about itemizing mortgage interest.?

Question

I bought a home last year, and when I filed my taxes they told me I could not itemize my interest, not sure why, maybe its because I bought my home in april. But anyway is there a certain amount of interest that needs to be paid in order to itemize it? Also can you itemize the interest on a car. And also for charity cost, e.g. church offerings? Let me know

Answer 1

In order to be worthwhile to itemize, your itemized deductions have to be higher than the standard deduction.

When you buy a house in the middle of the tax year, sometimes the mortgage interest payments aren't high enough to make it worthwhile to itemize. Your tax preparer probably crunched the numbers each way and did what would get you the better return (that's what I used to do).

Also remember to deduct your property taxes!

Your car loan interest is out, but you can deduct your charitable donations. Many churches will give you a written annual statement of tithes and offerings for this very purpose.

Answer 2

You automatically are entitled to what's called a standard deduction. For 2007 that's $5350 for a single person, $10,700 for a married couple. If your total itemized deductions are less than that, then you would take the standard deduction instead of itemizing, since it gives you less tax liability.

No, you can't itemize the interest on a car. But itemized deductions do include charitable contributions, medical expenses over 7.5% of your income, and state and local taxes. But again, if the total of all of these, plus your mortgage interest and real estate taxes, plus maybe a few other things, are lower than the standard deduction, then you wouldn't itemize.