Hi,
I am itemizing my deductions using Schedule A. I am not doing the standard deduction as my itemized deductions are more. I entered a charitable donation of $40 under personal deductions and credits. It shows up on Schedule A and my total itemized deductions increased by $40. However the tax I owe did not go down. Why?
For fun I tried $41, $42 and $43 for the donation. When I enter $43 my taxes owed goes down by $11. If I enter $42 or below, my taxes don't change. This does not make sense to me. Shouldn't any increase in my itemized deductions total on Schedule A result in some tax going down no matter how small an increase?
I would think my $40 would reduce my taxes by about $10 but it doesn't.