We have filed married jointly and entered our property taxes (over $10K) but saw no Federal deduction calculated. We are well below the AGI phase out. What are we missing

[xmasbaby0 · Accepted solution]

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  tough thresholds—medical expenses, job-related expenses, casualty and theft losses, for example, must meet thresholds that are 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. Here are the Standard Deductions for 2017

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

2017 Standard Deductions

Single    $6350  (65 or older + $1550)

Married Filing Separately   $6350  (65 or older +  $1250)

Married Filing Jointly           $12,700  (65 or older + $1250@)

Head of Household $9350  (65 or older + $1550)

[jkorzeniowski]

Thx for the quick reply. Our itemized deductions are greater than the standard but we are not seeing any credit for the paid property taxes.

[TaxGuyBill]

Probably AMT.  Does Line 45 of your Form 1040 have a number?

[jkorzeniowski]

Yes it does.

[TaxGuyBill]

Then that is the reason.

Real Estate taxes are not a deduction for Alternative Minimum Tax (AMT).  So if you are subject to AMT, the 'net effect' is that no deduction is allowed (technically, you get a deduction for 'regular' tax, but then your AMT is increased by that same amount).