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My property and state/local taxes were $10,000, my mortgage interest was 8000, and I had 4000 in job related expenses. Why is TT recommending the standard deduction?

 
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TomK
Expert Alumni

My property and state/local taxes were $10,000, my mortgage interest was 8000, and I had 4000 in job related expenses. Why is TT recommending the standard deduction?

Most likely, the program concluded that your standard deduction was a better choice then itemizing (entering your mortgage interest and SALT) given your financial situation.  

Under the new tax law, the SALT deduction (state & local tax, property tax, vehicle registration, sales tax) is capped at $10,000 ($5,000 if married filing separately). Prior to that, there was no cap. Taxpayers must still itemize to get this deduction – that part hasn't changed.

Job-related expenses for employees are no longer deductible in tax years 2018 through 2025 due to the Tax Cuts and Jobs Act (TCJA) that Congress signed into law on December 22, 2017.

In 2017 and prior tax years, employees could deduct unreimbursed expenses that the IRS considered "ordinary and necessary" for work, for example uniforms, tools, union dues, licenses, travel between job sites, and so on. These were considered miscellaneous itemized deductions subject to the 2% rule.

As a result of these and other tax law changes, our estimate is that nearly 90% of tax filers will now be taking the higher standard deduction, up from around 70% last year. And if you're in the 90% group, you won't see a change in your refund after entering your mortgage interest and property taxes.

The 2018 standard deduction is nearly double the 2017 amount:

$12,000 for Single

Add $1,600 if 65 or older

Add $1,600 if blind

$18,000 for Head of Household

Add $1,600 if 65 or older

Add $1,600 if blind

$24,000 for Married Filing Jointly or Surviving Spouses

Add $1,300 for each spouse 65 or older

Add $1,300 for each blind spouse

$12,000 for Married Filing Separately

Add $1,300 if 65 or older

Add $1,300 if blind

View solution in original post

2 Replies
TomK
Expert Alumni

My property and state/local taxes were $10,000, my mortgage interest was 8000, and I had 4000 in job related expenses. Why is TT recommending the standard deduction?

Most likely, the program concluded that your standard deduction was a better choice then itemizing (entering your mortgage interest and SALT) given your financial situation.  

Under the new tax law, the SALT deduction (state & local tax, property tax, vehicle registration, sales tax) is capped at $10,000 ($5,000 if married filing separately). Prior to that, there was no cap. Taxpayers must still itemize to get this deduction – that part hasn't changed.

Job-related expenses for employees are no longer deductible in tax years 2018 through 2025 due to the Tax Cuts and Jobs Act (TCJA) that Congress signed into law on December 22, 2017.

In 2017 and prior tax years, employees could deduct unreimbursed expenses that the IRS considered "ordinary and necessary" for work, for example uniforms, tools, union dues, licenses, travel between job sites, and so on. These were considered miscellaneous itemized deductions subject to the 2% rule.

As a result of these and other tax law changes, our estimate is that nearly 90% of tax filers will now be taking the higher standard deduction, up from around 70% last year. And if you're in the 90% group, you won't see a change in your refund after entering your mortgage interest and property taxes.

The 2018 standard deduction is nearly double the 2017 amount:

$12,000 for Single

Add $1,600 if 65 or older

Add $1,600 if blind

$18,000 for Head of Household

Add $1,600 if 65 or older

Add $1,600 if blind

$24,000 for Married Filing Jointly or Surviving Spouses

Add $1,300 for each spouse 65 or older

Add $1,300 for each blind spouse

$12,000 for Married Filing Separately

Add $1,300 if 65 or older

Add $1,300 if blind

My property and state/local taxes were $10,000, my mortgage interest was 8000, and I had 4000 in job related expenses. Why is TT recommending the standard deduction?

Thanks for the clarification and quick response
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