- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Deductions & credits
I think I can explain why there was a $12 increase when you only made a small change in your donation.
It has to do with the way tax liability is actually calculated. The tax table used by the IRS is not actually a straight percentage, it assesses tax based on increments of $50 worth of taxable income. For example, if you had $60,099 in taxable income and are single, then your tax liability would be $10,758. But, if you had $60,110 in taxable income (crossing the $100 threshold), then your tax liability would be $10,770. This would be a $12 increase. See 2017 Tax Table. So, when you made a small change to that donation, this is likely why it moved your refund by $12 because you crossed the next threshold.
Also, keep in mind, that since itemized deductions are only reductions of taxable income, you will eventually get to a point where between all your deductions and any credits you have available (i.e Child Tax Credit or education credits), you won't have any tax liability left to reduce. Also, depending on your income level, you could become subject to the Alternative Minimum Tax which would reduce the impact of your itemized deductions.