Itemizing vs. Taking the Standard Deduction

Apr 2, 2019
Estate Planning Tax Planning
Itemize or Standard Deductions?
Under the Tax Cuts and Jobs Act (TCJA), fewer people will be itemizing deductions — and more will be claiming the standard deduction — for the 2018 through 2025 tax years. Why? First, the TCJA almost doubled the standard deduction amounts:

Single filers and married people who
file separately
Heads of households $18,000$18,350
Married people who file jointly $24,000$24,400

These amounts will be adjusted annually for inflation. If you're 65 or older, you're entitled to slightly higher standard deduction amounts. After 2025, standard deductions are scheduled to return to pre-TCJA levels. Another reason that fewer people will itemize deductions is that the TCJA limits itemized deductions for all categories of state and local taxes to $10,000 combined (or $5,000 if you're married and file separate returns). For people in high-tax states or with sizable income and property tax bills, this limitation can significantly lower itemized deductions for 2018 through 2025. Your tax advisor can help determine whether it makes more sense for you to itemize deductions or take the standard deduction for 2018. For some taxpayers, it may be advantageous to “bunch” itemizable deductions in alternating years and then take the standard deduction in between.