I still have mortgage interest, 401k distributions, and charitable contribution. but with all my itemized deductions, still do not reach the standard deduction for married filing jointly ($24,400). So, which TurboTax product should I use? Can I just file for free. Do I need the more expensive TurboTax product just because I have mortgage interest, 401k distributions, and charitable contribution?
Any help would be apricated.
Paul
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Start with the Free edition and if you enter tax data that is not supported by the Free edition then you will need to upgrade to Deluxe or higher. Just do not enter any itemized deduction in the program if you know they will be less than the Standard Deduction.
Standard deductions for 2019
Single - $12,200 add $1,650 if age 65 or older
Married Filing Separately - $12,200 add $1,300 if age 65 or older
Married Filing Jointly - $24,400 add $1,300 for each spouse age 65 or older
Head of Household - $18,350 add $1,650 if age 65 or older
You will not be able to use the Free Edition with anything other than a very simple return that does not require the use of any of the three schedules that can be part of the Form 1040. You can start with the Free Edition and upgrade to Deluxe if the data you are entering requires a paid version.
If you are not going to have enough itemized deductions to exceed your standard deduction you are not required to even enter them if you do not want to.
STANDARD DEDUCTION
Many taxpayers are surprised because their itemized deductions are not having the same effect as they did on past tax returns. The new higher standard deduction and the elimination of certain deductions, as well as the cap on state and local taxes have had a major impact since the new tax laws went into effect beginning with 2018 returns.
Your itemized deductions have to be more than your standard deduction before you will see a change in your tax owed or tax refund. The deductions you enter do not necessarily count “dollar for dollar;” many of them are subject to meeting tough thresholds—medical expenses, for example, must meet a threshold that is pretty hard to reach. The software program uses all the IRS rules that apply to the expenses you enter, and it tells you if you have enough to use your itemized deductions or if using the standard deduction is more advantageous for you. Under the new tax laws, some deductions have been capped—there is a $10,000 limit to the itemized deductions for state, local, property and sales taxes.
Your standard deduction lowers your taxable income. It is not a refund.
2019 Standard Deduction Amounts
Single $12,200 (+ $1650 65 or older)
Married Filing Separate $12,200 (+ $1300 if 65 or older)
Married Filing Jointly $24,400 (+ $1300 for each spouse 65 or older)
Head of Household $18,350 (+ $1650 for 65 or older)
(Also + $1650 if legally blind)
If you want to skip entering your itemized deductions you can do that. Many people will not have enough itemized deductions this year to itemize, and will just be getting their new higher standard deduction. The thing is, though, that some of those deductions could make a difference on a state return even if they do not affect your federal return. Information flows from your federal return to your state return, so it might not be a bad idea to go ahead and enter them anyhow. It cannot hurt you.
The following states allow you to itemize deductions on just the state return: Alabama, Arizona, Arkansas, California, Delaware, Hawaii, Idaho, Iowa, Kentucky, Minnesota, Mississippi, Montana, New York, North Carolina, Oregon, and Wisconsin,
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