[sparky]

If you're earning $300k/year in California, you're paying ~$22k in state income tax, so you should be itemizing on your federal return with or without the mortgage, and subtracting the standard deduction from the benefit doesn't seem right.

[dpark]

Looks like you're right. I thought state and local taxes were deductible without itemizing but I was wrong. I've been itemizing for years so I guess I got that mixed up. (And I have no state income tax so it hasn't been a factor for years either.)

So that puts you back at the ~1000 mark for savings which probably gets you close to 1.5MM.