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I have an 5000.00 dollar difference in Standard deductions vs Itemized deductions, however it makes no amount changes in the refund stated, why?

 
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I have an 5000.00 dollar difference in Standard deductions vs Itemized deductions, however it makes no amount changes in the refund stated, why?

First, consider the standard deduction amount ($6300 single/$12,600 MFJ) as the baseline figure.  If your itemized deductions are lower -- whether by $1 or $5000 -- then the standard deduction still applies (and remains fixed).

If your itemized deductions are greater than the standard, and still nothing changes, then it could be that your taxable income is already at zero using the standard deduction.  Deductions (whether standard, itemized, or other) can only reduce your taxable income to zero; once that happens, additional deductions have no effect on your tax return.

So without knowing all the details of your return, consider the above 2 scenarios and also take a look at your taxable income figure on your return (line 43 on 1040; line 27 on 1040A).

If neither of the above scenarios applies, then it could be that you have a lot of medical deductions or "2% misc" deductions.  Both of these types of itemized deductions have AGI limitations where a base threshold has to be surpassed before you get even $1 of deduction.  For medical, it's 10% of AGI (7.5% if age 65+), and the misc threshold is 2% of AGI. As your income rises, the threshold to take these deductions also rises.

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Highlighted
New Member

I have an 5000.00 dollar difference in Standard deductions vs Itemized deductions, however it makes no amount changes in the refund stated, why?

First, consider the standard deduction amount ($6300 single/$12,600 MFJ) as the baseline figure.  If your itemized deductions are lower -- whether by $1 or $5000 -- then the standard deduction still applies (and remains fixed).

If your itemized deductions are greater than the standard, and still nothing changes, then it could be that your taxable income is already at zero using the standard deduction.  Deductions (whether standard, itemized, or other) can only reduce your taxable income to zero; once that happens, additional deductions have no effect on your tax return.

So without knowing all the details of your return, consider the above 2 scenarios and also take a look at your taxable income figure on your return (line 43 on 1040; line 27 on 1040A).

If neither of the above scenarios applies, then it could be that you have a lot of medical deductions or "2% misc" deductions.  Both of these types of itemized deductions have AGI limitations where a base threshold has to be surpassed before you get even $1 of deduction.  For medical, it's 10% of AGI (7.5% if age 65+), and the misc threshold is 2% of AGI. As your income rises, the threshold to take these deductions also rises.

View solution in original post