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makasha writes (in part):

I'm single and project income of about $150,000 this year. My 401k is fully funded at $14K, and I'll have about $3500 in property tax and $8400 of mortgage interest to deduct, assuming I can still deduct it at that income level... can I? I also deduct state income taxes paid, estimate that to be about $10,900.

I reply:

Interest on a purchase money mortgage for a primary residence is an itemized deduction available at all income levels. State and local taxes, however (including property taxes), are an AMT preference item. At your income level, you need to calculate your AMT as well as your ordinary tax, because you will end up paying whichever is greater. (That's not the order in which the forms calculate it, but that's how it plays out.) If you pay AMT, you will receive a diminished benefit or no benefit at all from your property taxes and state income taxes. --Bob
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