2. **California AGI:** Your California AGI is based on your federal AGI. Therefore, the reduced federal AGI due to the mortgage interest deduction also reduces your California AGI.
<h3>What Doesn't Qualify for the Deduction</h3>
If you need additional data
* **Reduced Tax Liability:** By deducting mortgage interest from your taxable income, you effectively reduce your overall tax burden, putting more money back in your pocket.
## California's Unique Twist: No State Income Tax Deduction
2. **Rental Property Mortgages:** Interest paid on mortgages for rental properties is generally not deductible.
* **Loan Purpose:** The loan must be used to acquire, build, or improve the taxpayer's primary residence. It cannot be for investment properties or second homes.
1. **Consult with a Tax Professional:** While online resources can provide general information, seeking guidance from a tax professional specializing in California tax law is crucial for personalized advice.
<h3>What Doesn't Qualify for the Deduction</h3>
If you need additional data
* **Reduced Tax Liability:** By deducting mortgage interest from your taxable income, you effectively reduce your overall tax burden, putting more money back in your pocket.
## California's Unique Twist: No State Income Tax Deduction
2. **Rental Property Mortgages:** Interest paid on mortgages for rental properties is generally not deductible.
* **Loan Purpose:** The loan must be used to acquire, build, or improve the taxpayer's primary residence. It cannot be for investment properties or second homes.
1. **Consult with a Tax Professional:** While online resources can provide general information, seeking guidance from a tax professional specializing in California tax law is crucial for personalized advice.
