Donations and refunds

[lukasbernat]

I donated couple thousands in cash in  2016. regardless if I enter those donations in TT, my refund amount stays the same. why is that? should I still enter them?

[xmasbaby0 · Accepted solution]

A charitable donation almost never changes your tax due or refund all by itself.  First, your donation does not count "dollar for dollar"--it is calculated by a percentage based on your tax bracket.  You need a LOT of other itemized deductions like mortgage interest or property taxes, medical expense, etc. to itemize and exceed your standard deduction.

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 thresholds  (for example: only the amount of your medical deductions that are over 10% of your AGI or over 7.5% if you are 65 or older are “counted”) or are calculated by a percentage of what you entered. 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. Here are the Standard Deductions for 2016

Your standard deduction lowers your taxable income.  It is not a refund 

2016 Standard Deductions

Single    $6300  (65 or older + $1550)

Married Filing Separately   $6300  (65 or older +  $1250)

Married Filing Jointly           $12,600  (65 or older + $1250@)

Head of Household $9300  (65 or older + $1550)

[lukasbernat]

ok cool - should I still enter them, and TT will figure it out in the next years? or should I enter them next year, when I have enough from both years to meet the thresholds.

[xmasbaby0]

You cannot save donations from 2016 to use on 2017.  It is up to you whether to enter them for 2016.  If you are not going to have enough other itemized deductions to exceed your standard deduction, then your donations will not make any difference this time.  You are already posting from Premier, so it appears that you are itemizing other deductions, right?