Individual itemized deductions may be limited. See the Instructions for Schedule A Form to determine what limitations may apply. For more information on the difference between itemized deductions and the standard deduction, refer to Publication 17, Your Federal Income Tax for Individuals or the Instructions for Form and Form SR. You may also refer to Topic No. More In Help. Certain taxpayers can't use the standard deduction: A married individual filing as married filing separately whose spouse itemizes deductions.
An individual who files a tax return for a period of less than 12 months because of a change in his or her annual accounting period. Otherwise, the standard deduction provides a larger reduction in taxable income. We estimate about This is more than 17 percentage points lower than it would have been in under pre-TCJA law. The difference in the proportion of itemizing taxpayers is largest for the third income group quintile 40 percent to 60 percent. The proportion of taxpayers in this quintile that would have itemized in under pre-TCJA law would have been nearly four times higher than the proportion of taxpayers that we estimate will itemize under current law.
Additionally, the TCJA reduced the value of several itemized deductions. It is also worth noting that the TCJA decreased the tax benefit associated with deductions by lowering individual income tax rates. By increasing the standard deduction and limiting certain itemized deductions, the TCJA reduced the percentage of taxpayers that itemize and limited how much the tax code can award tax relief to taxpayers who spend in particular ways. You have to understand the rules. Some itemized deductions come with a few hurdles, of course.
If you have medical expenses, for example, you can only deduct the portion that exceeds 7. You might have to spend more time on your tax return. You need proof. You need to be able to substantiate your deductions. That means keeping records and being organized. If you normally take the standard deduction and are thinking of itemizing when preparing your return next year, start saving your receipts and other proof for your deductions now. The standard deduction is basically a flat-dollar, no-questions-asked reduction in your adjusted gross income.
When you take the standard deduction, you basically opt to take a flat-dollar deduction instead of picking and choosing from the multitudes of individual tax deductions out there. Here are some big reasons people take the standard deduction instead of itemizing on their tax returns. It's faster. Taking the standard deduction makes the tax-prep process relatively quick and easy, which probably is one reason most taxpayers take the standard deduction instead of itemizing.
It usually gets bigger every year. Some people get more or less. The standard deduction is higher for people over 65 or blind, though filing status is still a factor. And if someone can claim you as a dependent, you get a smaller standard deduction. You both have to do the same thing — either itemize or take the standard deduction. If this is for you, you can learn more about the standard deduction in this article.
If your standard deduction is more than your itemized deductions, it might be worth it to take the standard and save some time.
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