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Itemized Deductions vs Standard Deduction

taxmanbrian
Level 3

Have a MFJ client with >$800k AGI.  Has Itemized Deductions greater than Standard Deduction, however the Standard Deduction is carrying forward to the 1040.  Any thoughts?  Variance between two is minimal but from what I'm reading, there shouldn't be any limitations on the Itemized Deductions.

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5 Replies 5
dkh
Level 11

So your Line 17 of Schedule A is greater than the Standard Deduction but Form1040 is showing Standard Deduction?       There not 65 or older which would give them a larger Std Ded?......

Just-Lisa-Now-
Level 15
Level 15

There are some limits on itemized deductions for high earners.  I grabbed this from Drake, you may want to do some more research.


https://kb.drakesoftware.com/Site/Browse/14159/1040-Limitations-on-Itemized-Deductions#:~:text=You%2....


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
IRonMaN
Level 15

There is a little thing called phasing out of itemized deductions when income hits certain limits.  Sounds like your client was a victim of the phaseout monster.

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chasetax
Level 7

have noticed that if deductions are greater than standard by $100 for example, but charitable contributions were $500---program does not itemize but enters $300 for charitable donations on line 10b-results in better refund on fedl but you must also look at state return to see what is best-in maryland if no itemize on fedl then no itemize on state

taxmanbrian
Level 3

Spot on chasetax.  I threw in another fake charitable deduction of a $1,000 to test whether the itemized deductions would carry over and it did.  My original ID was $127 over the threshold and I finally realized that the client was better taking the 1040 front side charitable deduction of $300 plus the standard deduction of $24,800 as compared to the ID of $24,927.  It took awhile, but it finally clicked.  By the way, I did remove the fake charitable deduction. Thank you to all for the responses.