Income Tax Questions

[randomkid]

Am I missing something or remembering incorrectly here? I have been working on our taxes today using TurboTax. I entered our mortgage interest for the year and it did not make one bit of difference in the amount of tax we owe. I could have sworn in the past that when I entered the interest paid, the amount would go down. Did something change or am I remembering this incorrectly. If interest paid on your mortgage is not deductible, then why do they ask you to enter it?

I know insurance is not deductible and when I entered the taxes, it made a difference, but this seems not right somehow.

ETA: How do I adjust our withholdings so that we don't end up paying $1000 every year, but don't end up with a huge refund either? Our deductions vary year to year, but not by a ton.

[baileygirl]

We don't do our own taxes, so I could be way off base...but wouldn't that mean the standard deduction was higher then your itemized deductions?

[KrisM]

If you don't have enough deductions to get over the standard deduction amount, the cordage interest won't matter. it won't know if you have enough until you enter info. Also included for itemized deductions are property tax, state tax, and charitable donations. For married filing jointly, the standard deduction is $11,400. You can fill out a new W4 to increase your withholding. You can change you number of deductions or just add an amount to be withheld.

[kbud]

The irs has a withholding calculator on it's website. I use it several times a year to check and adjust our withholdings. We can adjust witholdings through my dh's employer's employee website. I'm usually w/in $50 by doing this. You have the right idea though, you don't want to owe but you don't want too much back either.

http://www.irs.gov/individuals/article/0,,id=96196,00.html

[ThreeofUs]

Either you have deductions that are standard or that are itemized. Does the program "know" you were itemizing? (sorry, don't use TT) Did you put the rest of the schedule A deductions in?

[truly scrumptious]

I had a similar problem with Turbo tax last year. It turned out that it didn't adjust for the itemized deductions until I completed that entire section - then it ran all the calculations at once. That means that nothing happened right after I entered the interest paid, but it happened later on in the process. Maybe try to run through the entire section and see if it makes a difference?