Deductions exceed taxes

Forum|Forum|4 years ago
June 8, 2022
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I am retired. My deductions for 2022 will possibly exceed fed and state taxed amount. Due to large mortgage interest and planned large charitable giving. What is the outcome if that happens? Is there a carry-over for 2023?

SundayInSalem

Level 8

You may have a charitable contribution carryover into 2023. The amount you can deduct for charitable contributions is generally limited to no more than 60% of your adjusted gross income (AGI).

You can carry over any contributions you can't deduct in the current year because they exceed the limits based on your adjusted gross income (AGI). Except for qualified conservation contributions, you may be able to deduct the excess in each of the next five years until it is used up, but not beyond that time.

A carryover of a qualified conservation contribution can be carried forward for 15 years.

See Carryovers

pldiggsAuthor

Level 2

This is not only about charity as previously stated.

To be more specific, for example:

IRS Taxes accessed for 2022 is $16,000.

Mortgage interest paid 2022 $18,000.

Mortgage taxes paid $7,000.

Planned Charity cash to church $10,000.

My deductions all around will exceed taxes owed amount for year 2022.

What will happen to excess mortgage interest and taxes paid in addition to charitable giving? Will I get carryover tax credit on 2023 and what can be done, if anything to mitigate this?

Critter-3

Level 15

@pldiggs

You are confusing itemized deductions that can reduce your taxable income and the federal income tax on that taxable income. Itemized deduction cannot reduce your tax bill only your taxable income. So what will your taxable income be ?