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hokieag
New Member

Why can't you stake the standard deduction and still itemize the mortgage interest, school loan interest, div. interest, etc...?

why can't you stake the standard deduction and still itemize the mortgage interest, school loan interest, div. interest, etc...?
2 Replies
xmasbaby0
Level 15

Why can't you stake the standard deduction and still itemize the mortgage interest, school loan interest, div. interest, etc...?

Because that is the way the tax laws are written.  You cannot have it both ways---you either use standard deduction or itemized deductions.

 

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.**
Opus 17
Level 15

Why can't you stake the standard deduction and still itemize the mortgage interest, school loan interest, div. interest, etc...?

The itemized deduction is the government saying, "we'll allow some of your income to be tax-free if you spend it on these specific things we think are useful to society (like owning a home or donating to charity), or if you are forced to spend it in certain ways (like taxes and medical expenses)."  

 

 

The standard deduction is the government saying, "we'll allow some of your income to be tax-free because you probably do a lot of that other stuff already, but instead of making you count it all, we'll let everyone take a starter amount instead."

 

You don't get to list all your deductible expenses and also get the freebie.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
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