I want to understand the 25K standard deduction ?

[ArthurandDiane]

If I understand, I used to itemize many deductions on my rental property .  Now can I just take the standard deduction of 25K. My deductions have generally been in that neighborhood.   Also, we have a Home Based Travel Business started this year. Do I get to use the standard deduction for the Travel Business and another 25K deduction for the rental property ?

[DoninGA]

Your rental expenses are only entered on Schedule E for your rental property.  Your self-employment expenses are only entered on your Schedule C.  Neither of these types of expenses are used to determine if you can use the Standard Deduction or Itemized Deductions. 

Your personal itemized deductions are reported on Schedule A.  Deductions such as personal medical expenses, state income taxes paid, personal property taxes on your personal home, not used as a rental or in a business, mortgage interest, points and mortgage insurance on your personal home, not used as a rental or in a business.

If the total of all your personal itemized deductions on Schedule A are less than the Standard Deduction for your filing status then the Standard Deduction will be used on your federal tax return.

[johnd84]

Hi there, thanks for your question!

So the standard deduction relates to your personal deductions. For your situation your rental expenses and business expenses are not considered personal deductions. Personal deductions usually fall under medical expenses, home mortgage on your personal home(s), and charitable contributions. So for those you can either itemize or take the standard deduction on Schedule A. Additionally you will also want to track expenses on both your rental and business as you get to take those deductions, usually on Schedules C and E. So really you will take your listed expenses (deductions) for the rental, the business, and you will also take the standard or itemized deduction(s). You get the benefit of all three!