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I'm trying to insure that I understand US tax laws and itemization in order to calculate whether to take out a mortgage in order to maximize by 5 year gains. I have never purchased a home before but I have heard from friends that I am losing out on a tax shelter by not doing so. I pay 19k in rent annually.

I am projecting to earn 188k this year and I expect that to increase by 1-2% per year for the next 5 years, which is the period of time I wish to model in terms of buying vs renting and if the latter, how much to "buy" via a mortgage. I understand that the standard deduction is much higher now due to the tax law changes in 2018. I file single so that the IRS website says the standard deduction for me is $12,200 for 2019. Deductions for state and local taxes are limited by the 2018 law to $10,000, which is approximately what I pay annually. So, as I understand it, I can itemize and deduct the 10,000 i pay in state income taxes plus whatever interest I pay on a mortgage. Thus, if I take on a mortgage that pays interest of more than $2,200 per year, I would see a reduction in my federal tax liability? Plus I am paying to own the home instead of paying 19k in rent.

So, if I buy a home for say, 400k and put 20% down, I would finance 320k, and according to zillow pay almost 50k in interest and all of that interest iss deductable each year? So, my 10k state income plus an average of 10k interest deduction is 20k itemized and thus saves me 3k in taxes each year?

Am I thinking about this correctly?

I have used the phrase

"Don't let the tax tail wag the investing dog"

and it applies here as well. The tax break means this; your cost of a loan is reduced from 4.5% (that's about the 30 year rate today) to 3.06% (this is the net if you are in the 32% bracket.) Now, we can also discuss whether you are saving to your 401(k), $19,000 limit this year, potentially pushing you into the 24% bracket. It's taxable income over $160,726 that's taxed at 32% for you.

"You should get a house for the tax break" is as misguided as "You should buy Apple stock because I love apples". There are good reasons, and bad. A house has far more cost than the current interest you'll pay. At the very least, there's the property tax, which under the current code is no longer deductible for you (Note: OP already hit his $10K cap). There's insurance. There's ongoing repairs. Last year's new roof was $25K for me. I just got off the phone with an HVAC guy, as my AC just died. It's either a $500 repair or a $12,000 new system. Buying new, what we did, kept these things in the distance, but 20+ flew by.

If you are planning to stay single, don't plan to move in the next 7-10 years, or get married, consider the reasons you want a house. Privacy? Quiet? A yard to garden? Lots of space to entertain? All on the good side of the list. Note also, a marriage and family might mean needing a new house. If so, there's a cost there, and the risk of needing to sell when the market is against you. If that house is perfect, it means you, a single person, lived in a house big enough for 4 all those years.

That's my input for now. Any more details you offer would help others and me give you more precise answers. I'm not anti-buy, as long as it's for the right reason(s).

There are many, many articles, including posts here that discuss the rent vs buy issue. I may revisit and add a few links if I'm waiting for my HVAC guy for a while.....

Here's how you determine whether home ownership is financially advantageous to you:

If you aren't having cashflow problems (your mention of considering FIRE makes me think this isn't an issue for you), is ignore the monthly mortgage payment and look only at the costs of owning. Yes, a mortgage payment is more than just the cost of interest, but with excess money in the budget, the principal payment is effectively a real estate investment replacing some other investment.

Your costs will be $10k annually (typical, obviously it starts higher and decreases) in interest on the mortgage, paid with pre-tax dollars, plus post-tax dollars to property tax, insurance (homeowner's as well as windstorm, flood, or whatever applies in your area), routine upkeep (for example lawncare), and amortized maintenance.

Convert to post-tax dollars for simplicity, total it up, and compare the bottom line to your rental costs of $19k (in post-tax dollars) annually.

Don't forget to also consider the non-financial impacts this will have on your life, which JoeTaxpayer delved into.