Does Tax Reform Impact How I Claim Standard vs. Itemized Deductions?

Tax Reform, Uncategorized

On December 22, 2017 the biggest piece of tax legislation in about three decades was passed.  One of the biggest changes to the new law nearly doubles the standard deduction and eliminates or limits a number of common itemized deductions many people took in past years. Our estimate is that nearly 90% of taxpayers will now take the higher standard deduction, up from about 70% in previous years.  You may have itemized your tax deductions in the past if you are for instance a homeowner, but now you may benefit from taking the standard deduction if the new standard deduction amount for your filing status is more than your itemized tax deductions.

This means more taxpayers can feel empowered to take charge of their finances starting with doing their own taxes with TurboTax. And if they have tax questions they can get their tax questions answered with a live CPA or Enrolled Agent, with TurboTax Live.

Check out our Standard vs Itemized Tax Deduction Interactive, that in just five quick screens helps you understand the changes in the standard deduction and itemized deductions, gives you an estimate of your deductions based on inputs, tells you if may claim standard vs itemized, and makes recommendations on some end of year tax moves you can make to increase your itemized deductions.

Comments (46) Leave your comment

  1. My wife and I are seniors (she is 69 and I am 70) and recently moved into a Senior Living Community, we are selling our condo of 12 years. How will the Capital Gains that we will realize from the sale effect our tax return for 2018?

  2. I made some estimates using my download version of Turbo Tax for 2018 and determined that I’ve significantly underpaid federal income tax–state as well. Any suggestions before the year is over?

  3. Lisa, I normally use Turbo Tax Premium but if I am going to now put into a standard deduction category which version should I use ( ,assuming I will not be entering any stock and bond info.

  4. What impact does the Federal Law have on my California State return as to whether itemizing or taking their standard deduction?

  5. If I am thinking of doing taxes for others, is there a version of turbotax that I can purchase to do say 50-100 tax returns for others and small businesses?

  6. I am going to contribute to a charity from a part of my required minimum distribution from an IRA. Will Turbo Tax walk me through the correct place on my tax forms to deduct this contribution from my RMD?

  7. I qualify for the standard deduction according to my inputs, but in the past, having stock trading activity required an itemized return. Has that changed?

  8. In 2017 your itemized deductions were reduced if your AGI exceeded certain thresholds. Is there a similar reduction in 2018?

  9. If the Standard deduction works for me why should I use Turbo Tax when I will not itemize? Can’t I then use the Short IRS Form?

  10. What about real estate transfer taxes, which may be a form of sales tax? Also, are moving expenses deductible? We paid for a move this year.

  11. Is it possible for a married couple to file a joint but separate return with one taking itemized deductions and the other standard? Also, when will Turbo Tax 2018 be available?

  12. Because of the age of my computer (iMac mid 2007, El Capitan Version 10.11.6), Turbotax has indicated that I will not be able to use the disc version of Turbotax 2018. Can I download the 20189 version? I use Premier. Do I have any other options?

  13. I believe that I made an error on my State taxes because I did not receive the usual $2700 on my State taxes as s refund this year.
    What do I do to correct it and receive it? Not sure where this error is located but this was the first time I did not receive it as my State tax refund.

  14. Nice but you don’t address AMT – still subject to that if don’t itemize and you income is in between to two thresholds?

  15. Standard deduction, personal exemption and all the rest, this is no tax deduction, this new tax law is bullshit, the rich get richer the poor get poorer

  16. I thought I read that while the itemized deduction has been doubled, the personal exemption for members of the household has been eliminated. Is that true?

  17. I gather the standard is better than itemizing my state taxes, but I also do a Schedule C because I run a small nonprifit business under “doing business as” and have always written off the losses that way, can I still do this?

  18. Hi thanks for the guidelines. It looks like I would be eligible for the standard deduction, however, I I have a tax loss carry forward and have gains losses on stocks. Does that mean I still need to itemize?
    Thanks Dave

  19. I sold a home Nov.17th 2018 which had been a rental the amt we paid was $55,000.00 and it sold for 161,000.00 to be able to sell it we spent roughly $20,000.00 can you give me an estimate what my capital gains amount would be…is this enough info..

  20. I’m retired and receive a union pension & social security with a small part time job with earnings of 55,000. My fiancé works full time and earns 67,000. Would we save money on taxes being single or getting married before the first of the year? We don’t owe on our house so no mortgage deduction. Rick

  21. I’m 65 and retired. I live on my Social Security check & monthly withdrawal from investments. Are these both considered income?

  22. Hi Lisa,
    We have a rental property. The evaluation about standard vs itemized tells me to take the standard deduction but it doesn’t ask any questions about the rental. When I start turbo tax for this year, will it explain that?

  23. I wish you had a practice tax form that I could fill out to project my income and deductions. Otherwise I just have to guess with all of the changes that have been made.

  24. Lots of people will find that they will pay more taxes by losing the itemized deduction. The double standard deduction turns out to be a hidden raise in taxes as the exclusion is also raised. As a result, I expect my taxes to increase at least 2000 over last year. I am afraid that alot of people will find an unfortunate surprise when they do their taxes. I am hopeful that zeroing out the deductions on my W-4 will avoid a check to the IRS from me this year.

  25. I am retired with pension income. I have a lot of stock trades Does that prevent me from taking standard deduction and may i contribute to my IRA

  26. My husband is a DOT employee – a locomotive engineer. We usually have deductions for his away from home expenses and other expenses that are deductible. Will these be deductible in 2018?

  27. This link is a bit confusing as I thought it was going to allow me to begin my 2018 return when I click on Start here and I was brought into the 2017 return prep

    1. Hi Donna,
      Thank you for your comment. That’s because 2018 isn’t ready yet, but check back in and you will be able to start your 2018 taxes.
      Best,
      Lisa Greene-Lewis

  28. Your quick guide to Standard vs Itemized did not include the State Income Tax deduction. The guide says I gave $21,000 in itemized deductions so the standard would be better. But it doesn’t allow me to add the $11,000 in state income taxes. In 2017 my itemized deductions were $33,000. It looks like my tax liability will be greater because I will be stuck with the $24k standard.

    1. Hi Glenn,
      Thank you for your feedback. The state income tax deduction is included where you input property taxes, state income taxes, and sales tax which all together can only be $10,000 as a result of the new tax law. I hope this helps.
      Best,
      Lisa Greene-Lewis

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