Level 8

Tax reform

I'm in the middle of doing my taxes. I've ALWAYS itemized, but this year might be the first where the Standard Deduction "wins." 

I know I'll be close (as I'm now retired).

I'm wondering two things:

a) I presume that TT will automatically jump to the standard deduction after it determines that itemizing isn't the best, and

b) if others are discovering this too. Perhaps my world of keeping track of various deductions will become a waste of time (for things like charitable contributions, even medical expense).

 

In my own case, in Oregon, it's annoying that the $10,000 SALT cap has hit us (as we are a high property tax State).

Level 14

Tax reform

a) correct, you can put in dummy numbers to prove that to yourself if you prefer

b) yup - it'll be easier as more taxpayers will just use the standard deduction.  for example, all the Misc deductions have been eliminated

Level 8

Tax reform

Thanks for the quick reply. I guess I'm going to go through or run the numbers this one time. If I'm no where near close to the Standard Deduction my tax world will get might simple (though I'll still need to obtain various brokerage house numbers so-as to capture a few sources of income). 

It will be nice to avoid logging all the various expenses (even if I'm not a fan of the tax-cut passed in December 2017 - which will be costly for us all in the long-run).  πŸ™‚

Level 6

Tax reform

Sir, It just so happens that I posted the opposite recommendation. My experience is different. I got the recommendation that I should use the Standard Deduction. Which I assumed was correct. When I played  with it to itemize versus taking the Standard Deduction of $24,000 for my wife and me (filing jointly) my federal return did dropped from $1,200 to $900.  However, my state return increased from $300 to $900. I picked up $300. I recommended that people play with it. It may be different depending on where you live.

Level 8

Tax reform

Thanks for the advice. I'll have a look.

For us, I don't think the State will get any larger because we seem to be getting virtually all of it back!

Level 4

Tax reform

im aa fellow Oregonian.  I hope you are correct about it looking like we are getting most of our state taxes back.  Im almost ready to start them and find out.

 

Good luck in what you find out.

Level 8

Tax reform

I got nearly all my Oregon pre-paid back! It was amazing.

The tricky part, though, is how will this work in the future.

With this new Federal standard deduction business it looks like I won't have to keep records anymore... BUT Oregon will still allow one to itemize (and I believe one should). So, if I don't enter in itemized details in the federal return, will I have to manually add them to the State process?
I know an CPA friend and I plan on asking him soon.

Level 6

Tax reform

My husband and I have always itemized. Last year that equaled $46,000 in deductions, this year we had to take the standard deduction of $24,000. That hit us hard with now owing close to $5000. Which of the itemized deductions are still available? We file married filing jointly. All of our kids are older so for years we have not had them as dependents. Any help?

Level 14

Tax reform

It’s effectively all the same as last year with two major exceptions

1) state and local taxes which includes property taxes are limited to $10,000

2) misc deductions are zero