How are itemized deductions going to work under the new tax code?

by Scott Rubinsky, CPA | Dec 29, 2017
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I understand that the standard deduction and itemized deductions are an either/or option (you may use one or the other, but not both). How are itemized deductions going to work with the new tax code given that single filers are limited to $10,000, yet the standard deduction is set at $12,000?

The tax legislation is very new, and my response is based on what I have read thus far. To itemize under the new tax plan, you will probably need mortgage interest and charitable contributions to add to the $10,000 capped amount for state and local income taxes and property taxes.

For example, a taxpayer would want to consider itemizing if the amount of the capped state, local, and property taxes, plus mortgage interest and charitable contributions, exceeds the $12,000 standard deduction for a single person or $24,000 for married couples.

It looks like 2018 will be an interesting filing year.

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Answered by: Scott Rubinsky, CPA, is a sole practitioner in Huntingdon Valley, Pa.

Disclaimer
The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
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