I'm a first time home buyer how much of the interest on the loan is a tax dedication,?

Something sounds fishy, you claim to pay $20,000 in interest (which equates to a 300,000 to 400,000 mortgage) yet you have a fixed income?

You are entitled to claim all interest paid, along with property taxes paid, if you itemize your deductions. However, DO understand that you cannot claim the entirety of these deductions over and above the 'standard deduction'. The current standard deduction allowed for married filing jointly is about $11,000. You get that deduction with NO evidence that you have paid interest, property taxes, etc. If you show that you have paid MORE than the standard deduction allows, you get to claim that excess as a deduction. But you do NOT get the standard deduction, PLUS the entirety of your interest and property taxes paid. You get one OR the other.

I am guessing that is time for you to seek advice concerning how deductions work.

You can deduct all mortgage interest on your primary dwelling (home) as well as the property taxes paid in 2011. We do it every year. If you have a home equity loan, you can deduct all the interest for 2011 as well.

100 percent of the interest you pay on your mortgage is a tax deduction.

It sounds like you're doing something wrong with your taxes. What type of income do you and your spouse make, and how much of that income is withheld for taxes?

with this amount, you are able to claim it all.

The reason you are owing taxes: you are not having enough withheld each pay period, etc.

You need to talk with a tax professional.