The benefits of itemized and standard deductions shifted during the 2019 tax reform, leaving most filers with even more questions. In order to file your return with confidence, it’s important to stay informed.
The standard deduction
The standard deduction simplifies the filing process by assigning an easy, no-proof-required, flat-dollar adjustment to your gross income. That means no deduction hunting or messy receipts. Just quick, simple filing.
Tax law changes in 2018 nearly doubled the value of standard deductions — making them worth more than itemized deductions for most people. Single filers alone saw their standard deductions increase from $6,350 to $12,000. Because of that increase, most people benefit more by claiming the standard deduction.
John is filing as single and his itemized expenses total $8,000. The new, standard deduction for single filers is $12,000 — a $4,000 advantage over his itemized total.
Taking the standard deduction is more beneficial in this scenario, and for many others among the general public.
Tax changes in 2018 pulled levers on both sides. They increased the standard deduction amount and reduced what’s considered a tax-deductible expense.
Those changes mean that many previously available deductions were redefined, reduced, or entirely phased out.
Some impacted deductions include:
- Interest on home equity loans
- The amount of state and local deductions
- Unreimbursed employee expenses
- Tax preparation fees
- Theft and personal casualty losses
- Medical expenses
Because the tax laws change every year, our tax experts stay well-versed in changes that impact the annual tax code. And we’re happy to pass that information along to you. Because informed filing is confident filing.
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Source : TaxAct Blog