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Level 3

Using A Value Less Than Standard Deduction

The choice between the Standard Deduction or Itemization is restrictive. Under the Standard Deduction rule, can one use a smaller value than the Standard Deduction without breaking IRS rules?
11 Replies
Level 15 pk
Level 15

Using A Value Less Than Standard Deduction

If you are qualified to use Standard Deduction and using any of the tax software in the market ( for  DIY  use ) there is no way you can over-ride the amount  and e-file.

I just wonder why would you not  want to use  what the law allows you  --- what are you trying to achieve ?

Level 18

Using A Value Less Than Standard Deduction

If you are filing married separate, then if your spouse files using itemized deductions, then you are required to file itemized, no matter which method is "better". TurboTax gives you the option on choosing standard or itemized. I think (relying on memory) that you search for "Itemized Deductions" and jump to the result; if this works, it will give you a screen that allows you to choose itemized even if TurboTax is suggesting standard. (Sorry, the TurboTax Help screens are coming up blank on previous answers, so I can't give you a useful link).

 

I don't know of any reason you can't choose itemized, even if there is no benefit to do so.

Level 20

Using A Value Less Than Standard Deduction

HOW TO FORCE ITEMIZED DEDUCTIONS

https://ttlc.intuit.com/questions/1900142-how-do-i-change-from-the-standard-deduction-to-itemized-or...

 

STANDARD DEDUCTION

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.

 

https://ttlc.intuit.com/questions/4482873-which-federal-tax-deductions-have-been-suspended-by-tax-re...

Level 3

Using A Value Less Than Standard Deduction

There are competing factors in my tax return. R&D tax credit limited by AMT within Form 3800. TurboTax used the Standard Deduction since it a larger number then the Itemized Deduction. When I forced the program to use the smaller Itemized Deduction, the total tax went down with the change in the AMT and increased R&D tax credit. With a variation of Itemized Deductions, , there is a minimum tax with the right value of Itemized Deductions. Since one cannot arbitrarily inflate Itemized Deductions, the obvious answer is to use a smaller Standard Deduction by override to achieve the minimum tax. So the question is will the IRS complain about using a number smaller than the Standard Decoction?
Level 14

Using A Value Less Than Standard Deduction

DO NOT OVERRIDE Turbo Tax - that just creates more issues.

 

using a smaller number than the standard deduction IS the itemized deduction, which you are able to do if it is to your advantage.  Just click the check box on line 18 of schedule A in TT.

 

 

 

 

 

 

Level 20

Using A Value Less Than Standard Deduction

No, you are not permitted to use a self-chosen lower amount for the standard deduction.  The standard deduction is defined by statute, § 63(c):

https://www.law.cornell.edu/uscode/text/26/63

Level 14

Using A Value Less Than Standard Deduction

Let's not confuse things, while I agree you can't use a lower 'standard deduction', in most cases you have the option to use a lower itemized deduction, which is really get to the result the question is really asking. 

 

please see IRS publication 501, page 22 where it states:

 

Standard Deduction
Most taxpayers have a choice of either taking a standard deduction or itemizing their deductions. If you have a choice, you can use the method that gives you the lower tax

Level 20

Using A Value Less Than Standard Deduction

RonSP appears to be wanting to use a deduction of more than the amount of itemized deductions and less than the standard deduction, which is not permitted.

 

Even if one was permitted to do so, I suspect that the result would be not only a lower current-year tax liability but an increased future-year tax liability due to lost carryforward of the R&D tax credit.

Highlighted
Level 14

Using A Value Less Than Standard Deduction

<<RonSP appears to be wanting to use a deduction of more than the amount of itemized deductions and less than the standard deduction, which is not permitted.>>

 

if if this is what he is trying to do, then I agree it is not permitted .... it’s either take the standard deduction as stated or take the itemized deduction that you can document ... but you are permitted to take the lower of the two in most situations by clicking the check box on line 18 

Level 3

Using A Value Less Than Standard Deduction

I have to admit not being able to use a self chosen lower Standard Deduction Amount is strange when one can do the same for Itemized Deductions just by leaving certain deductions out. Poof. There goes my brilliant idea to optimize my return and find a minimum tax value. Thank you all for your support and guidance.
Level 15 pk
Level 15

Using A Value Less Than Standard Deduction

Whereas I have failed to find any specific prohibition against  using as deduction other than allowed itemizing of expenses or the standard,  the nearest is the definition of  taxable income --->  26USC 63

 

 

(b)Individuals who do not itemize their deductions        In the case of an individual who does not elect to itemize his deductions for the taxable year, for purposes of this subtitle, the term “taxable income” means adjusted gross income, minus—

(2)  the deduction for personal exemptions provided in section 151, and
(3)any deduction provided in section 199A.
 
 This clearly says that the default position is "Standard Deduction"  unless and until the taxpayer "elects" to use Itemized deduction  ( with its own rules as to what is  and what is not allowed  and how much as deduction ).  Thus the taxpayer is faced only with two choices -- ( 1) use Standard Deduction allowed  for the tax year and filing status   OR  (2) Elect to use Itemized Deduction.

I think therefore  the answer is NO -- you cannot use  a number different  than the Standard Deduction  , unless  you choose to Itemize .