thanks for the reply, my mortgage is about $2200/month and i am an intern. If i am not paying back my loans can i still deduct the interest i am accumulating and how exactly does the whole working half the year exactly work to my benefit?
Remember that you can only deduct the interest on your mortgage, not the whole amount. If it's a new mortgage, most of that payment goes to interest, though, so you should be well over the $5350 standard deduction (if you're single). Yes, you can still deduct the mortgage interest even if you're not paying back your student loans.
Working half of the year implies you were going to school for the other half. This leads us to two conclusions:
First, you'll have education expenses that can be credited back to you (thanks to the Lifetime Learning Credit).
Second, you've probably only earned around $25,000 if you're a resident. This qualifies you as a 'low earner' that is in a pretty low tax bracket to start with, so all the above mentioned credits and deductions should lower your tax burden down to zero.
If it is the case that you just began your residency after school, you'll likely see no benefit from the mortgage interest deduction. My fiancee, for example, owed around $1700 in taxes for working half the year when taking the standard deduction. After the Lifetime Learning Credit, she owed $0 in taxes. Then she received the stimulus rebate from March of 2008 (remember those checks you probably didn't qualify for because you didn't have an income in '07 and didn't file taxes? You get yours now!) for a total tax burden of ($300). She got back all the money she had withheld during her half year of work, plus $300.. not too shabby!
I've posted a lot about this and other tax topics on our blog if you're interested in reading some more.
