I went through the interview process where I've added all my itemized deductions to determine if I should do standard or itemized. In the end TurboTax determined that standard was the biggest saving for me. However, The 'tax counter' didn't show a decrease when standard deduction was applied. I could see this counter decreasing for other deductions such as HSA deduction. Is standard somehow automatically applied to my owe/refund amount?
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You automatically get your standard deduction unless you enter enough itemized deductions to exceed the standard deduction or unless you literally "force" itemizing. Look on line 8 of your Form 1040 for your standard deduction.
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Many taxpayers are surprised this year 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.
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
2018 Standard Deductions:
Single $12,000 (+ $1600 65 or older)
Married Filing Separately $12,000 (+ $1300 65 or older)
Married Filing Jointly $24,000 (+ $1300 each spouse 65 or older)
Head of Household $18,000 (+ $1600 65 or older
Look at line 8 of your Form 1040 to see your standard or itemized deductions.
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