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Why doesn't my refund increase when I enter a deduction?

by TurboTax Updated 3 weeks ago

If your refund doesn't budge after you've entered your medical expenses, charitable contributions, mortgage interest, sales taxes, or your state, local, or property taxes, it's probably because your Standard Deduction is currently higher than your itemized deductions. We automatically select the deduction that works best in your favor.

In addition, those who own property or live in a state with higher income taxes and property values like New York or California may not get as big of a SALT deduction (state and local property, income, and sales taxes) as they did in prior years. That's because there's now a cap, or limit, on the SALT deduction, whereas in prior years these taxes were fully deductible. The deduction is capped at $5,000 for couples filing separate returns and $10,000 for everybody else.

If and when your itemized deductions exceed your standard deduction amount, we'll automatically tip you over to the itemized deduction so you can benefit from the bigger tax break.

Tip: Some folks confuse a deduction with a dollar-for-dollar credit, but that's not how deductions work. If you donate $300 to charity, your taxable income is reduced by $300, assuming you're itemizing. You'll never see a $300 donation translate to a $300 increase in your refund.

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