Brad and his wife Dee will take the $24,400
standard deduction on their joint tax return in 2019, so they will not itemize.
As of the end of 2017, The District of Columbia, Idaho, New Mexico, and Utah all began their tax calculations with federal AGI, (7) then directly linked to the federal
standard deduction and personal exemptions.
The taxpayer must then compare this amount to the total itemized deductions claimed for 2018 or to the
standard deduction that could have been taken for 2018.
Under optional
standard deduction (OSD), the taxpayer can avail himself of up to 40 percent of gross sales or receipts as a deduction.
For 2018, we took the
standard deduction, and we owe $1,180.
Their total itemized deduction is $14,000, which is above the
standard deduction. In 2019, A received a $1,500 state income tax refund due to the overpayment of state income taxes in 2018.
On their joint 2018 tax return, they can claim a $24,000
standard deduction, plus an extra $1,300 each, because the IRS considers them aged (over 65).
It's also worth noting there's a misconception out there that because of the increase in the
standard deduction, people think they can no longer itemize.
But a major plot twist may make the issue even more vexing for some this tax season: The
standard deduction nearly doubled in 2018 to $12,000 for single filers, $18,000 for heads of household and $24,000 for joint filers.
The increasing of the
standard deduction along with the curtailing or elimination of many deductions individuals could previously itemize on their returns has resulted in the concept of clustering becoming palatable to many more individuals.
Thompson, the immediate past president of the National Society of Accountants, used the oil change analogy in considering this year's tax changes, including a nearly doubled
standard deduction that could cut business for tax preparers.