My total income is around $40,000 with deductions of around $19,500 however, Turbo Tax is using the standard deduction for filing my taxes with the IRS; why is that?

[hcyoung]

See above for explanation.

[TaxGuyBill]

Having $19,500 of "deductions" is a vague thing, so it would help if you clarify what type of deductions they are (such a self-employed-business deductions, medical deductions, mortgage interest, etc.).

[hcyoung]

The $19,500 is mainly donations to charities and carryover charity donations and deductions from years past. They are not business expenses since I am retired. Turbo Tax walked me through the deductions allowed and I entered the amounts (they are shown on one screen and compared to last years expenses and totals) however, in the end the program used the standard deduction amounts.

[TaxGuyBill]

If go to search box in the upper-right hand corner of TurboTax, type "itemized deductions, choosing".  When you 'Change Your Decision', does it show the full amount of Itemized deductions?

If you go into the "Forms" mode in the upper right hand corner and open up "Schedule A", does it show your charitable contributions on Lines 16-19?

[hcyoung]

When I go to the forms and check Schedule A the itemized deductions show up. However, when go to the search box and I type "itemized deductions, choosing" the only thing I get is a list of questions and answers. Schedule A does show on Lines 16 - 19 the itemized deductions (charity and holdover deductions) but line 19 stated "Limited" and the amount of $1,250.00. I do want to let you know that with the standard deduction I am receiving a refund for Federal and State taxes paid. However, what happens when I do next years taxes and the deductions I list this year are not shown as holdover deductions?

[hcyoung]

I think I misquoted the Turbo Tax program I am using; I am using Turbo Tax Premier

[TaxGuyBill]

You said your income is around $40,000, but that isn't matching up with the "limited" response.

What does Line 37 of your Form 1040 show?

[hcyoung]

Line 37 is the adjusted income of $2,499.00  However, I receive a little over $20,000 from Social Security and I have a rental where I receive $19.600 that makes a total of around $40,000 gross income.
I know I am going to receive the taxes I paid back that I paid in but, again, my concern is next year what happens to my deductions that should be carried over?

[TaxGuyBill · Accepted solution]

Your charitable contributions are limited to 50% of your AGI.  That is why the Standard Deduction is larger than your Itemized Deductions.

The 'excess' charitable contributions (the amount over $1250) SHOULD automatically carry over to next year.  When you file next year's tax return, just double check that they get carried over.  In the event that they don't, there should be a place to enter the carryover amount.