Taxes (itemize or not?)

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
CrazyCatLady
Posts: 119
Joined: Mon Apr 30, 2018 9:19 pm

Taxes (itemize or not?)

Post by CrazyCatLady » Mon Apr 08, 2019 7:46 am

Traditionally I have itemized. I ran the numbers, and I have enough deductions to itemize this year as well. However, I live in a state which requires you to itemize state if you itemize federal. My itemized deductions for state are about $2,000 less than the state standard deduction.

If I don't itemize, my federal taxes are about $50 more, but my state taxes are about $150 less (so I'd get back about $100 more in total). Any reason not to take the standard deduction for fed and state? I can't think of any, but wanted to double check. Thanks!

abner kravitz
Posts: 474
Joined: Tue May 05, 2015 7:42 am
Location: Beaufort County, SC

Re: Taxes (itemize or not?)

Post by abner kravitz » Mon Apr 08, 2019 7:51 am

I can't think of any

User avatar
Stinky
Posts: 2250
Joined: Mon Jun 12, 2017 11:38 am
Location: Sweet Home Alabama

Re: Taxes (itemize or not?)

Post by Stinky » Mon Apr 08, 2019 7:55 am

CrazyCatLady wrote:
Mon Apr 08, 2019 7:46 am
Traditionally I have itemized. I ran the numbers, and I have enough deductions to itemize this year as well. However, I live in a state which requires you to itemize state if you itemize federal. My itemized deductions for state are about $2,000 less than the state standard deduction.

If I don't itemize, my federal taxes are about $50 more, but my state taxes are about $150 less (so I'd get back about $100 more in total). Any reason not to take the standard deduction for fed and state? I can't think of any, but wanted to double check. Thanks!
Minimize your total taxes. If that means not itemizing, so be it.
It's a GREAT day to be alive - Travis Tritt

MikeG62
Posts: 2214
Joined: Tue Nov 15, 2016 3:20 pm
Location: New Jersey

Re: Taxes (itemize or not?)

Post by MikeG62 » Mon Apr 08, 2019 7:56 am

abner kravitz wrote:
Mon Apr 08, 2019 7:51 am
I can't think of any
Me either.
Real Knowledge Comes Only From Experience

4803
Posts: 21
Joined: Sun May 29, 2016 11:51 pm
Location: Maryland

Re: Taxes (itemize or not?)

Post by 4803 » Mon Apr 08, 2019 7:59 am

One more reason not to itemize is that taking the standard deduction simplifies the return and reduces the likelihood of an audit.

Best wishes,

:) 4803.

jebmke
Posts: 9787
Joined: Thu Apr 05, 2007 2:44 pm

Re: Taxes (itemize or not?)

Post by jebmke » Mon Apr 08, 2019 8:01 am

CrazyCatLady wrote:
Mon Apr 08, 2019 7:46 am
Traditionally I have itemized. I ran the numbers, and I have enough deductions to itemize this year as well. However, I live in a state which requires you to itemize state if you itemize federal. My itemized deductions for state are about $2,000 less than the state standard deduction.

If I don't itemize, my federal taxes are about $50 more, but my state taxes are about $150 less (so I'd get back about $100 more in total). Any reason not to take the standard deduction for fed and state? I can't think of any, but wanted to double check. Thanks!
This is common now in Maryland. At my TaxAide site we run the numbers both ways and take the optimal approach. We also look at taking the sales tax instead of income tax since in a few cases, this is better even if the sales tax is slightly lower.
When you discover that you are riding a dead horse, the best strategy is to dismount.

User avatar
CAsage
Posts: 1471
Joined: Sun Mar 27, 2016 6:25 pm

Re: Taxes (itemize or not?)

Post by CAsage » Mon Apr 08, 2019 8:45 am

Would it be possible to fill out Schedule A for the federal return, and is (your tax software) smart enough to take the greater of the itemized deductions OR the standard deduction? Then automatically flow the same numbers (itemized) to my CA state return, taking the larger deduction again. I plan to file that way for 2019 (standard for Federal, Itemize for state) as I'm bunching property taxes every odd year. Seems like you can file out Schedule A whether or not you use it?

At my Taxaide site, I have done several returns for other people wherein they take standard for IRS, itemize for state. but you enter the itemized numbers on the 1040.
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.

User avatar
HueyLD
Posts: 7178
Joined: Mon Jan 14, 2008 10:30 am

Re: Taxes (itemize or not?)

Post by HueyLD » Mon Apr 08, 2019 8:58 am

CAsage,

In some states, one must use the same deduction for both federal and state. In other words, a taxpayer in those states has to use either standard deduction on both returns or itemized deduction on both returns.

User avatar
CAsage
Posts: 1471
Joined: Sun Mar 27, 2016 6:25 pm

Re: Taxes (itemize or not?)

Post by CAsage » Mon Apr 08, 2019 9:02 am

HueyLD wrote:
Mon Apr 08, 2019 8:58 am
CAsage,

In some states, one must use the same deduction for both federal and state. In other words, a taxpayer in those states has to use either standard deduction on both returns or itemized deduction on both returns.
Okay.
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.

Topic Author
CrazyCatLady
Posts: 119
Joined: Mon Apr 30, 2018 9:19 pm

Re: Taxes (itemize or not?)

Post by CrazyCatLady » Mon Apr 08, 2019 7:33 pm

Thanks everyone for the confirmation! That's what I figured, but taxes make me paranoid :)

ccieemeritus
Posts: 628
Joined: Thu Mar 06, 2014 10:43 pm

Re: Taxes (itemize or not?)

Post by ccieemeritus » Mon Apr 08, 2019 10:30 pm

One other advantage of standard deduction is if you get a state tax refund, you will get a 1099G which you have to deal with next year. But if your federal deduction is standard then 1099G for state tax refund has no impact.

jebmke
Posts: 9787
Joined: Thu Apr 05, 2007 2:44 pm

Re: Taxes (itemize or not?)

Post by jebmke » Tue Apr 09, 2019 7:28 am

ccieemeritus wrote:
Mon Apr 08, 2019 10:30 pm
One other advantage of standard deduction is if you get a state tax refund, you will get a 1099G which you have to deal with next year. But if your federal deduction is standard then 1099G for state tax refund has no impact.
If you itemize and the total deduction amount is less than the standard deduction you could have taken then the refund is not taxable next year. There are other situations where the refund is not taxable but one needs to go through some calculations to determine how much, if any, the refund is taxable.
When you discover that you are riding a dead horse, the best strategy is to dismount.

RadAudit
Posts: 3584
Joined: Mon May 26, 2008 10:20 am
Location: Second star on the right and straight on 'til morning

Re: Taxes (itemize or not?)

Post by RadAudit » Tue Apr 09, 2019 7:34 am

CrazyCatLady wrote:
Mon Apr 08, 2019 7:33 pm
taxes make me paranoid
Old saying - Just because you're paranoid doesn't mean that they aren't out to get you.

Best of luck.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The cavalry isn't coming, kids. You are on your own.

fru-gal
Posts: 1115
Joined: Wed Jan 02, 2019 9:48 pm
Location: New England

Re: Taxes (itemize or not?)

Post by fru-gal » Tue Apr 09, 2019 7:35 am

ccieemeritus wrote:
Mon Apr 08, 2019 10:30 pm
One other advantage of standard deduction is if you get a state tax refund, you will get a 1099G which you have to deal with next year. But if your federal deduction is standard then 1099G for state tax refund has no impact.
The one part of doing my taxes that I do not like, is every year I have to imprint on my brain how to handle on the federal form the state tax refund and state tax payments, since for some reason that just seems complex to me. Still I go the route of minimizing taxes even if it takes more work.

User avatar
teen persuasion
Posts: 950
Joined: Sun Oct 25, 2015 1:43 pm

Re: Taxes (itemize or not?)

Post by teen persuasion » Tue Apr 09, 2019 11:31 am

NY also used to require the same choice of standard deduction or itemized. After the tax reform and the issues with SALT, they changed the rules to allow you to choose either. Check to see if your state may have changed, too.

TBillT
Posts: 794
Joined: Sat Sep 17, 2011 1:43 pm

Re: Taxes (itemize or not?)

Post by TBillT » Tue Apr 09, 2019 2:07 pm

teen persuasion wrote:
Tue Apr 09, 2019 11:31 am
NY also used to require the same choice of standard deduction or itemized. After the tax reform and the issues with SALT, they changed the rules to allow you to choose either. Check to see if your state may have changed, too.
Virginia and Maryland have decided to stick with the old rule that if you take Federal Standard deduction, then you must take also state standard deduction, which is problematic for us borderline itemizers. That means we have run the tax cases both ways to see which is better.

I am not aware of any other states in that situation, but there could be others. I was orginally saying Virginia was the only state doing that, until I realized Maryland was also doing that.

User avatar
grabiner
Advisory Board
Posts: 25244
Joined: Tue Feb 20, 2007 11:58 pm
Location: Columbia, MD

Re: Taxes (itemize or not?)

Post by grabiner » Tue Apr 09, 2019 11:00 pm

TBillT wrote:
Tue Apr 09, 2019 2:07 pm
teen persuasion wrote:
Tue Apr 09, 2019 11:31 am
NY also used to require the same choice of standard deduction or itemized. After the tax reform and the issues with SALT, they changed the rules to allow you to choose either. Check to see if your state may have changed, too.
Virginia and Maryland have decided to stick with the old rule that if you take Federal Standard deduction, then you must take also state standard deduction, which is problematic for us borderline itemizers. That means we have run the tax cases both ways to see which is better.

I am not aware of any other states in that situation, but there could be others. I was orginally saying Virginia was the only state doing that, until I realized Maryland was also doing that.
MD has the requirement only in one direction; you can itemize federal taxes and take the standard deduction in MD. VA has the requirement both ways; if you itemize federal taxes, you must itemize in VA.
Wiki David Grabiner

Post Reply