Electing to Itemize

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  • dyne
    Senior Member
    • Jul 2005
    • 764

    #1

    Electing to Itemize

    Can taxpayers elect to itemize on a joint return even though the total itemized deductions
    total LESS than the standard deduction ? What do you experts think ?
    The reason: By doing so, it saved them $1,000 in federal tax. When NOT itemizing, the
    AMT raised their tax causing them to owe $1,000 MORE. By itemizing the AMT
    did NOT apply. I forced the AMT and checked AMT in both computations. I assume that
    this is just a quirk that will rarely be encountered. I quoted IRC 63(e)(1) and (e)(2) but looking
    closer this may not be the proper authority.
  • Matt Sova
    Senior Member
    • Jun 2005
    • 645

    #2
    Yes

    They can itemize as opposed to using the standard deduction.
    I would put a favorite quote in here, but it would get me banned from the board.

    Comment

    • Bees Knees
      Senior Member
      • May 2005
      • 5456

      #3
      There is a check box on line 29 of Schedule A just for that very election.

      Comment

      • dyne
        Senior Member
        • Jul 2005
        • 764

        #4
        electing to itemize

        The POINT I was trying to make was: Normally if the Standard Deduction is larger
        than the itemized deductions, your federal tax liability is REDUCED. In this rare
        case by claiming the larger standard deduction, the tax liability INCREASED.
        The cause was the AMT. So, I forced the computer to itemize, even though the
        itemized deductions were about $4,000 LESS than the standard deduction and by
        so doing the tax liability DECREASED by about $1,000. Normally this would cause
        the tax to increase. My question is in this rare type of situation can the taxpayer
        elect to itemize ? I think so, but I have never encountered this situation.
        Any comments ?

        Comment

        • John of PA
          Senior Member
          • Jul 2005
          • 1104

          #5
          Not rare

          This is not rare, in fact the Lacerte Diagnostics make a comment on this whenever there is an AMT. Sometimes (maby one out of 50 cases) the AMT can be lowered by taking the lower Std Deduction, rather than itemizing, or vice versa.

          Comment

          • dyne
            Senior Member
            • Jul 2005
            • 764

            #6
            electing to itemize

            Again in my case the standard deduction is HIGHER, not lower. The itemized deductions
            were about $8,800 whereas the standard deduction was $12,000. THIS is what seemed
            strange to me.

            Comment

            • dtlee
              Senior Member
              • Oct 2005
              • 807

              #7
              Some Itemized are not added back

              The standard deduction is completely omitted as a deduction when the AMT is calculated. However, there are specific itemized deductions which are still allowed for AMT purposes. Thus, while the entire standard deduction would be added back on the 6251, only a portion of the itemized deductions would be.
              Doug

              Comment

              • Bees Knees
                Senior Member
                • May 2005
                • 5456

                #8
                Originally posted by dyne
                The POINT I was trying to make was: Normally if the Standard Deduction is larger
                than the itemized deductions, your federal tax liability is REDUCED. In this rare
                case by claiming the larger standard deduction, the tax liability INCREASED.
                The cause was the AMT. So, I forced the computer to itemize, even though the
                itemized deductions were about $4,000 LESS than the standard deduction and by
                so doing the tax liability DECREASED by about $1,000. Normally this would cause
                the tax to increase. My question is in this rare type of situation can the taxpayer
                elect to itemize ? I think so, but I have never encountered this situation.
                Any comments ?
                Like I said, there is a check box on line 29 of the Schedule A to itemize even though the standard deduction is higher. That is the point of checking the box on line 29...when the tax is lower by itemizing even though the standard deduction is higher than itemizing.

                Why else would there be a check box on line 29?

                Comment

                • John of PA
                  Senior Member
                  • Jul 2005
                  • 1104

                  #9
                  Well put Doug

                  Originally posted by dtlee
                  The standard deduction is completely omitted as a deduction when the AMT is calculated. However, there are specific itemized deductions which are still allowed for AMT purposes. Thus, while the entire standard deduction would be added back on the 6251, only a portion of the itemized deductions would be.
                  Well put Doug, that explains it. I always check for this phonomina(sp) at the prompting of my software whenever there is AMT, but I have only seen it save once, but it makes total sense.

                  Comment

                  • dyne
                    Senior Member
                    • Jul 2005
                    • 764

                    #10
                    electing to itemize

                    Thank you Bees Knees:
                    I did not comprehend what you were telling me until you repeated it.
                    Thanks. Best wishes.
                    Fred

                    Comment

                    • Deltax
                      Member
                      • Apr 2006
                      • 44

                      #11
                      Originally posted by Bees Knees
                      Like I said, there is a check box on line 29 of the Schedule A to itemize even though the standard deduction is higher. That is the point of checking the box on line 29...when the tax is lower by itemizing even though the standard deduction is higher than itemizing.

                      Why else would there be a check box on line 29?
                      You also check the box when a couple files MFS and one of them itemizes
                      Brian

                      Comment

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