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 (111) Leave your comment

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

  2. 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

  3. 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?

  4. 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?

  5. 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

  6. 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..

  7. 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

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

  9. 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?

  10. 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.

  11. 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.

  12. 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

  13. 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?

  14. I would like to see the tax tables for 2017. Also, will we be taxed on our Fed and State refund from the previous year like in the past?

  15. Can you go by my 2017 return to see if based on last years figures it would be best for me to itemize or take standard deduction? Things have not changed in my life to make a great impact as far as my itemized deductions and fixed income.

  16. Actually now most people should be able to do their taxes on their own without the need for Turbotax. It is really not that difficult.

  17. Hi Lisa,
    We are on the fence regarding whether the standard deduction of $24,000 or itemized deductions. I have heard in the future we will end up paying more in taxes because the law is written that way. Can you shed any light on that? Thanks in advance,.
    Joe

  18. I didn’t work all last year and I worked 7 months this year I have always been head of household. My son worked for the first time this year. How do I do my taxes? Do I include my son as my dependent as i have in the past years?

  19. I’m retired but working part part time 16 hrs a week will i have to do any thing special witn my taxes this year i always have used turbo tax?

  20. I have over 80000 in 1099-g winnings and want to claim losses against it. Will i have to itemize like i did in the past to do this. Also your status did not have married filing seperately.

  21. We have been renting a condo that we lived in before renting. We sold that condo in 2018 and will have a capital gain. We also have carry forward losses from investment losses. Will the new tax law (and your software program…we have been a Turbotax user for many many years) allow the carryover losses to be applied to the capital gains on the condo sale?

  22. Hi Lisa, I found out this fall that my elderly parents (they aren’t americans and live in South America) have been saving money for me and other siblings (one has my power of attorney) in saving accounts they opened under my name (surprise!!!)
    Then I found out that I must disclose those foreign accounts since they have a little over 10.000 each for the last couple years!!! Am I able to do all paperwork through turbo tax or should I take it to a CPA OR TAX ATTORNEY? Thanks

  23. We began living outside of the U.S. in August, 2018, maintaining a U.S. address in Texas for social security and banking. We understand there is an exemption for ex-pats living permanently outside of the U.S. How does the new law work for us?

  24. I have used deluxe edition all years before since my itemized total was more than the standard deduction. If I start using deluxe this year and find out that I only need to take the standard 24K standard deduction, will Turbotax not charge the full cost and direct me to the Free edition?

  25. 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

  26. 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

      1. Lisa, in 2017 our (Married Filing Jointly) personal exemptions 20K and itemized deductions 28K added up to 48K of total deduction. This year, for 2018, we have to pick between 24K of standard deduction and very limited 14K of itemized. So, with more deductions to 401K last year, new smaller income bracket tax and similar salary, we owe more in federal taxes. Is there a bug in software?

    2. Glenn, it’s because you live in a high tax Democrat run state. I don’t know for sure based on your info, but high tax states no longer get to piggy back on the federal tax code, to keep jacking up their tax rates. My recommendation would be to push for elected officials that don’t raise taxes or create things that require more taxes, along with just go Republican because NY, NJ, CA, CO etc are all Democrat run 🙂

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