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jjs4998
New Member

My itemized deductions are 43,250

Medical Expenses: 17,446
Property taxes: 10,000 (limited)
Deductible interest: 15,804.
3 Replies
xmasbaby0
Level 15

My itemized deductions are 43,250

Are you considering the caps and thresholds you have to meet?

 

Are you making the common mistake of just adding up all the amounts for your itemized deductions without considering the caps and thresholds that must be met?

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. (Only the amount that is MORE than 7.5% of your AGI counts)   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.  You will see your standard or itemized deduction amount on line 12 of your 2020 Form 1040.

 

 

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.**
Mike9241
Level 15

My itemized deductions are 43,250

taxes seem ok unless you are married filing separate the it's $5,000

apparently, the mortgage interest is fully deductible since it would seem your mortgage balances are below the threshold of $750,000 (could be more if you have then before 2018). but if your mortgages cover more than 2 residences some would not be deductible, 

have you reduce medical by 7.5% of adjusted gross income?  we have no way of knowing if what you list as medical expenses are all qualified expenses. 

 

also note that if the medical expenses have not been reduced for reimbursements to be received in 2021, you may have taxable income from those reimbursements in 2021

NCperson
Level 15

My itemized deductions are 43,250

@jjs4998 - the medical expenses should be reduced by

 

1) anything that was reimbursed by insurance or an HSA, FSA, etc.

2) only the remaining part that exceeds 7.5% of your adjusted gross income is deductible, 

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