Estimating if one qualifies for medical, and charity, deductions.

[cactibob]

My wife and I have always tracked and documented our medical/dental and charity itemized eductions. Based on a discussion with a friend (who also uses TurboTax), he thought our medical/dental expenses would have to be way higher than what ours are, to get a deduction. I'm also thinking our charity deductions may not be deductible.

To possibly save ourselves the effort of documenting these possible itemized deductions, is there a way to know what amount of each of  those two categories puts us into an itemized deduction threshold (based on our income, and filing jointly)? If not exact, even a rough idea might help, because we have a pretty good idea (even an exact amount for medical/dental) for one of us, through Quicken reporting) of how much we've spent in both categories, without necessarily getting exact totals.

I've done our taxes the last two years in TurboTax (and saved screen snapshots as I progressed through the screens), and our income is pretty much the same. Maybe there is info at the IRS; I'm not sure. Thanks for any possible help.

[NCperson]

If your deductions are less than $24,000 then you are going to file “standard” in most all cases

When calculating that $24,000

- state and local taxes are limited to $10,000
- only the medical expenses that exceed 7.5% of your income is deductible (in 2019 that becomes 10%)
- there are no misc deductions

Interest and charitable deductions are mainly deductible

[cactibob]

Our total deductions are less than $24k. Our most significant deductions are mortgagee interest and property taxes, but even adding in the rest, I believe we'll be *far* under $24k. We have a couple/few other deductions, like vehicle tax and (TurboTax) tax preparation fees, but those are *tiny*. If I believe we will not qualify for itemized deductions (and if I don't bother to add the non-qualifying defections up), should I just enter "0" for those deductions?

Thank you very much for your help!

[IsabellaG]

The only issue with leaving the expenses completely off the federal section in TurboTax is that some states allow for itemized deductions, which the program transfers over from the federal return, even if you don't itemize on federal. For instance, New Jersey allows a deduction for Medical Expenses that exceed 2% of your income, and New York is allowing itemized deductions for the first time this year. So if you're in a state that allows some or all of these expenses, you should still go through the process of entering your deductions on the federal side. If not, then it's okay not to bother.

[cactibob]

(Apologies for not checking the following when I originally posted my question.) I just reviewed our 2017 taxes in TurboTax, and found the following:

When I reviewed the medical deduction phase, TT told me right up front: "If you and (spouse) had less than $xxx [which was so much higher than what I had a good estimation of what ours would have been] [in deductions], it won't affect your refund, so we want to make sure you're not doing extra work."

We ended up with a standard deduction: TT "Deductions Analysis": "You claimed a standard deception of $xxx. You also claimed personal exemptions of $xxx. These two items added up to all of your total deductions and exemptions."

I entered out mortgage taxes and insurance, and those ended up showing on IRS Form 1098.

Questions:

1) Are mortgage taxes and insurance outside of the matter of itemized deductions vs. standard? Given those were listed on Form 10908, I'm thinking the answer is yes, but the last sentence in "Deduction Analysis" has me wondering.

2) Are Charitable Donations, and Cars and Other Things you Own (we just claim car registration fees) part of itemized deductions (when itemizing returns a higher deduction than standard)? I'm thinking that must be the case; I'm asking because in those sections, I was not told: "If you and (spouse) had less than $xxx [in deductions], it won't affect your refund." Probably those two categories *are* deductible (without a minimal percentage threshold, like medical) if your total deductible amount gives you a better deduction than standard."

To cut to the chase a bit, since we don't qualify for itemized medical deduction, and our charitable and car registration are pretty small, it appears there is no need for us to enter those. Our combined mortgage tax and insurance is about $10k. We are in the 25% tax category. Based on your typical figure of $24k of itemized deductions, this appears to are the case.

Thanks again.

[NCperson]

1)  mortgage and taxes are part of the $24k analysis.   not sure what you are referring to as 'insurance' if that is home or auto, it is not deductible in any event. if it's long term care, it's part of medical.  Further, taxes - the sum of property and state are further limited to $10k when filing joint as a part of the $24k. 

2) charitable deductions are part of the $24k and are not limited (they are limited to a percent of your income but let's not get too technical and worry about it here)

the only other thing to consider as it's been mentioned on other posts is that some states still allow those deductions, so in some cases it might be worth entering the deductions as TT will go with standard for federal and itemized for state and you may be better off.  But it is very state specific.  

[cactibob]

Apologies: I should have said "mortgage interest and tax". (Our home insurance is included in our escrow, and the wrong term came to mind.)

Re 1) This is more of an IRS tax form puzzlement for me, but since mortgage interest and tax are part of the $24k analysis, and we ended up with the standard deduction, I wonder why TurboTax lists those two 'deductions' on Form 1098. Our charitable deductions and car registration don't show up as part of itemized deductions (because we took standard), yet the 1098 lists two amounts that don't matter, since we took the standard deduction.

Thank you.

[NCperson]

it ends up that way because the mortgage company reports both interest and property taxes on the Form 1098.  

[cactibob]

Ok, I think I'm almost fully understanding. Are you saying that if one ends up with the standard deduction, that 1)mortgage  interest and property taxes are nonetheless deductible, 2) mortgage interest (but not property tax) is nonetheless deductible, 3) property tax (but not mortgage interest) is nonetheless deductible, or 4) neither are deductive. Sorry; a bit of a tax beginner still. Thanks for sticking in there for me.