Tax bill drops significantly when switching to Itemized deduction that is less then standard deduction

[shahlanuk]

My Itemized deduction amount is less then Standard deduction of $24K. TT says it has automatically selected Standard deduction for me and asks me if I want to select Itemized deduction. When I select Itemized deduction the tax amount goes down by ~$3K!! When I flip back to Standard deduction, the tax goes up. Is this a bug in TT Sw?

[MargaretL]

No, it's not a bug, it is working exactly as it should. If you choose itemized deduction, which is much smaller than the standard deduction, your tax refund WILL go down. You are lowering your taxable income by a smaller amount.

If you choose standard deduction, it means you are lowering your taxable income by $24K, so the tax refund will go up. The reason why the program allows you to decide is because some taxpayers prefer to use a smaller, itemized deduction for state tax reasons. 

If your refund goes up by using the standard deduction, choose standard deduction. 

[NCperson]

 MargaretL 

please re-read the question..... the phenomenon is opposite your response 

[shahlanuk]

I should have been more clear. By tax bill, I mean the amount of Fed tax I owe. What I see is that the amount I owe, goes down when I switch to Itemized deduction, even when Itemized deduction is lower then Standard deduction. It does not make sense.

[MargaretL]

Thank you both for clarification. I'm not sure why that would happen without looking at your return in detail. What you may want to do is look at 1040 worksheet for both scenarios and compare the entries. You can look at it prior to paying for the program.  Go to Tax Tools and select Tools>View Tax Summary>Preview my 1040... 1040Worksheet shows you line-by-by-line entries. 

[CliffHanger]

Same thing is happening to me for 2019. In Virginia, we are required to file the same as we do federal. We have to itemize both, or take standard deduction on both.  Our deductions added up to $26,991, just under the standard deduction of $27,000 for joint return of 2 people who are over 65.  TurboTax Deluxe suggested standard, but if I switch to itemized, my tax liability to Virginia goes down by $700.  I am guessing that TurboTax looks only at what is best for federal, and doesn't include the Va return in its calculations. This is a serious mistake.