It is not exactly dollar for dollar, since you have the standard deduction in any case, so essentially you only benefit from the excess of your State
taxes over the standard deduction.
And then it only decreases your taxable income by the amount that you are
over the standard deduction.
«Current mortgage interest may not even be enough to be
over the standard deduction,» said Carlos Dias Jr., founder of Excel Tax & Wealth Group in the Orlando, Fla., area.
Single taxpayers, on the other hand, would see a tax benefit of more than $ 600
over the standard deduction (for $ 7K in interest expense), although the net tax savings would only be about $ 150 for a payer in the 25 percent tax bracket.