Do we take the standard deduction for our house interest payments or do we take 20% of the actual tax amount paid

Q) We live in Grand junction Colorado and bought a house here. We have a mcc a mortgage credit certificate that says we can deduct 20% from our interest paid on our first mortgage. The interest paid is less than the standard deduction. Do we take the standard deduction or do we take 20% of the actual tax amount paid. Tax amount we actually paid is less than the standard deduction.

A) You can take the standard deduction or the mortgage credit certificate (MCC), whichever is greater. The MCC is a tax credit that reduces the amount of taxes you owe, while the standard deduction is a dollar-for-dollar deduction from your taxable income. If your mortgage interest is less than the standard deduction, you will save more money by taking the standard deduction. However, if your mortgage interest is greater than the standard deduction, you will save more money by taking the MCC.

To determine which option is better for you, you will need to compare the amount of your mortgage interest to the amount of your standard deduction. You can find the amount of your mortgage interest on your mortgage statement. You can find the amount of your standard deduction on the IRS website.

If your mortgage interest is less than the standard deduction, you will save more money by taking the standard deduction. You can simply deduct the standard deduction from your taxable income when you file your taxes.

If your mortgage interest is greater than the standard deduction, you will save more money by taking the MCC. To claim the MCC, you will need to file Form 8396 with your tax return. You can find Form 8396 on the IRS website.

If you have any questions about which option is best for you, you should consult with a tax professional.