Is there a shorthand way to estimate whether the s...
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Is there a shorthand way to estimate whether the standard deduction or itemized deductions for 2020 will be better, without having to do my entire return?

 
3 Replies
Level 15

Is there a shorthand way to estimate whether the standard deduction or itemized deductions for 2020 will be better, without having to do my entire return?

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. 

 

 

2020 Standard Deduction Amounts

 

Single $12,400   (+ $1650 65 or older)

Married Filing Separate  $12,400   (+ $1300 if 65 or older)

Married Filing Jointly $24,800   (+ $1300 for each spouse 65 or older)

Head of Household $18,650  (+ $1650 for 65 or older)

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
Level 15

Is there a shorthand way to estimate whether the standard deduction or itemized deductions for 2020 will be better, without having to do my entire return?

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, 

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
Level 10

Is there a shorthand way to estimate whether the standard deduction or itemized deductions for 2020 will be better, without having to do my entire return?

You could manually fill out Schedule A (see link below) and compare the total with the Standard Deduction amounts that xmasbaby gave you above.   That would be a good estimate for which one you will use.

 

But as was pointed out, even if you use the Standard Deduction on your Federal return, some states use at least some of the Itemized Deduction on the State return.  So it is a good idea to fill out the Itemized Deduction expenses even if you will be taking the Standard Deduction on the Federal return.

 

https://www.irs.gov/pub/irs-pdf/f1040sa.pdf

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