Could Itemized Deductions Change Depending on the Results of the Election?November 06, 2020
Read up on potential changes to itemized deductions under the presidential nominees’ tax plans.
Attention itemizers: you’ll want to read up on potential changes to itemized deductions depending on the results of the recent election. We have all the details on what could potentially change or remain the same in our 2020 Tax Comparison Chart, but here’s a look inside.
Background- itemized deduction vs. standard deduction
To refresh your memory….
Standard deduction: The standard deduction is a dollar amount that reduces the amount of income on which you are taxed and varies according to your tax filing status. Beginning in 2018 the standard deduction is nearly doubled ($24,000 for most married taxpayers and $12,000 for most single taxpayers).
Itemized deduction: Itemizing means listing out each deduction you qualify for, the sum of which is used to lower your adjusted gross income.
What could change?
Republican Nominee Donald Trump wants to preserve the current federal tax rules for itemized and standard deductions. He wants the rules extended beyond 2025.
Democratic Nominee Joe Biden would like to reinstate the limit on itemized deductions for higher income taxpayers. He also supports limiting the tax benefit of itemized deductions to 28% for upper income individuals. He would also call for eliminating the $10,000 state and local tax limitation.
Check out more on what could change in the coming years in our 2020 Tax Comparison Chart.