Why did TT use the Standard Deduction with my deductions exceeded that?

Forum|Forum|7 years ago
March 23, 2019
2 replies
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My husband and I are filing as "married, filing jointly" as we've done for years and years. Our incomes are about the same as they've been and we live in the same house we've been in for years. When I entered everything into TT today, I itemized, as we've always done, to see if that would be better than the new standard deduction of 24K. Even though the itemized deductions totaled more than 26K (state and local taxes, mortgage interest, and charitable donations), TT said that it would use the standard deduction. The only reason I can figure for this is new limit of 10K for state/local property and income taxes. Does this sound like the correct reason to tax-savvy folks out there?

N

NCPERSON1

If you are stating you had $26k of deductions without regard of the SALT cap of $10k, how much were your SALT deductions ?

Also look at Scheudle A to assess what occurred

X

xmasbaby0

Employee

STANDARD DEDUCTION

Many taxpayers are surprised this year because their itemized deductions are not having the same effect as they did on past tax returns. The new higher standard deduction and the elimination of certain deductions, as well as the cap on state and local taxes have had a major impact.

Your itemized deductions have to be more than your standard deduction before you will see a change in your tax owed or tax refund. The deductions you enter do not necessarily count “dollar for dollar;” many of them are subject to meeting tough thresholds—medical expenses, for example, must meet a threshold that is pretty hard to reach. The software program uses all the IRS rules that apply to the expenses you enter, and it tells you if you have enough to use your itemized deductions or if using the standard deduction is more advantageous for you. Under the new tax laws, some deductions have been capped—there is a $10,000 limit to the itemized deductions for state, local, property and sales taxes.

Your standard deduction lowers your taxable income. It is not a refund

2018 Standard Deductions:

Single $12,000 (+ $1600 65 or older)

Married Filing Separately $12,000 (+ $1300 65 or older)

Married Filing Jointly $24,000 (+ $1300 each spouse 65 or older)

Head of Household $18,000 (+ $1600 65 or older

Look at line 8 of your Form 1040 to see your standard or itemized deductions.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**