I have a very similar income and expense structure from this year to last. This year though I get a "congratulations the standard deduction (married filing jointly) is the best option for you" message, but in comparison with last year I had $51K in deductions using the itemized approach. I see that the individual exemption is gone, but is there some other reason why Turbo Tax wouldn't recommend itemizing given my expenses are relatively the same as last year? Thanks in advance for the help. I'll have a whopper of a bill to pay if this I really should take the standard deduction...
Welcome to tax reform
State and local taxes (SALT) deductions are limited to $10,000 - and you had about $36k last year
And there is no longer a “personal excemptoon” but the standard deduction is raised to $24k
Hi NC person. Thanks for the helpful response.
I guess there is a middle-minority that actually has to pay much more in taxes while the super rich get a big break. Sucks for us.
Did you see that last line? "State and Local taxes greater than $10,0000 " .............. $ -31, 026.
That is how much of your state an local taxes you could
not
use this year as an itemized federal deduction due to the new 10,000 limitation.Many taxpayers are surprised this year 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.
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. 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
2018 Standard Deductions:
Single $12,000 (+ $1600 65 or older)
Married Filing Separately $12,000 (+ $1300 65 or older)
Married Filing Jointly $24,000 (+ $1300 each spouse 65 or older)
Head of Household $18,000 (+ $1600 65 or older
Look at line 8 of your Form 1040 to see your standard or itemized deductions.