Why am I only able to get the standard deduction when my total deduction for last year was $40,000

[Rachel_W]

There are a few reasons that the Standard Deduction may be higher than your Itemized Deductions this year.

Due to the Tax Cuts and Jobs Act (TCJA) that Congress signed into law on December 22, 2017, beginning on your 2018 Tax Return, the Standard Deduction has been increased to the following amounts based on your filing status:

• Single/Married File Separate- $12,000
• Head of Household- $18,000
• Married Filing Joint- $24,000

Because of these increased Standard Deduction amounts, many taxpayers who are used to Itemizing their Deductions on Schedule A will no longer need to do so because the Standard Deduction is higher than their Itemized Deductions.

Secondly, there is a new limitation on the amount of taxes you can deduct on your Schedule A.  Beginning in 2018, the combination of State, Local, Property, and Sales Tax (SALT) deducted on your Schedule A is limited to $10,000.  It sounds like this new limitation is what impacted your Itemized Deductions this year.

Another change that may have affected your Itemized Deductions is the fact that the new tax law eliminated all "Miscellaneous Itemized Deductions" formerly allowable on your Schedule A.  This includes all "unreimbursed employee expenses",  Tax Prep Fees, Portfolio Advisory Fees, etc.

For more information on this new limitation as well as other changes that may have an effect on your return, check out this TurboTax FAQ: How Will New Tax Legislation Affect My 2018 Tax Return?

[chiduc2]

I had the same problem.  My Itemized Deduct of 60k does not work.  TurboTax keep zero down my Mortgage Interest (even my loan was in 2016 with amount of 768k) and Charity.  Is there an AGI limitation? I thought the limited was removed by the TAX REFORM?  

Best Regards,

[xmasbaby0]

Are you making the common mistake of just adding up all the amounts for your itemized deductions without considering the caps and thresholds that must be met?

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.  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. 

2019 Standard Deduction Amounts

Single $12,200   (+ $1650 65 or older)

Married Filing Separate  $12,200   (+ $1300 if 65 or older)

Married Filing Jointly $24,400   (+ $1300 for each spouse 65 or older)

Head of Household $18,350  (+ $1650 for 65 or older)

Look on line 9 of your 2019 Form 1040 to see your itemized/standard deduction amount

Read through this article to gain a better understanding of the tax laws that changed for 2018 and beyond.

https://ttlc.intuit.com/questions/4482394-how-will-tax-reform-affect-my-2018-federal-tax-return

[chiduc2]

HI CHAMP,

thank you for the reply.  Yes, I read the information about the Tax Reform Act whole night.  Yes, I understand there are limitations caused by the TCJA like Medical expense, or, max 10k for local tax and property tax.   these are on the negative sides.  on the positive side, the TCJA helps to eliminate the Pease limitation (AGI upper limit).   however, it does not have the full detail of if there is any AGI limit that would cause the Turbo Tax to zero down my entry for the mortgage interest.   in my case, on Schedule A, line has listed 556,699.   Line 7 capped at 10,000 (make sense).   Line 8a is the problem, it is "0".  regardless I entered 27,000 data from 1098 Mortgage interest.     I deleted the data and re-enter it to be sure, and again, it zero down again.   I even play around with the loan balance to bring it down to below 750k, it still zero me down on line 8A.

I wonder if something is wrong, or, it is zero down due to some kine of limit on the AGI 556,699.

I hope someone would have the answer regarding to this.

thank you so much,