Are you seeing an increase or decrease in taxpayers itemizing?

[AZ-Tax]

With more and more taxpayers refinancing at lower mortgage rates, are you seeing an increase or decrease in taxpayers itemizing?

[geekgirldany]

I've seen a decrease. Many have refi to lower interest rates and are no longer able to itemize. Some are getting close and I can force it in on Federal. By the time State and Federal refunds are combined they come out better because State standard deductions are low.

I've had a few with paid off homes ask me if they should get a loan again to claim the interest to write off their tax returns. I tell them it is far better to have a paid off home then to have such a write off. Even had some with the cash to pay for a new home ask that question.

[mastertaxguy]

Itemizing deductions vs standard deduction

On the other hand, this tax season about 15% of the prior year "non itemizers" ended up itemizing on 2013 Federal (and where applicable State) returns as the result of either the client tax questionaire (TB version modified) OR responses to questions during interviews. While some do not like the TP/client in front of them when doing the return, I have found having the client in front of me and challenging them on the "same as last year" lie helpful in many cases for them. For those who claim they can't itemize or haven't in years, I always offer to use their standard deduction when itemized is larger so they can pay more tax: usually they decline.

Also, we found (at the office I am at this year) several new clients who insisted on itemizing in prior years and this year only to have us point out the standard Federal deduction would be a better choice.

Bottom line to me/us: do an interview, go through the Schedule A when apporpirate. Time consuming: of course. Better results: yes.

[Lion]

I ALWAYS interview. I just do NOT prepare the return while interviewing. Not usually, anyway.

I've had a lot of clients complain about higher taxes which result from lower mortgage interest deductions. But with high CT and NY taxes, most of my clients are still itemizing except for the very few retirees without jobs who paid off their homes. So, I get to be the bearer of bad tax news to those with more disposable income due to their lower mortgage interest rates. You can't make people happy all the time!

[sandigi]

Decrease

Definately a decrease in Schedule A clients this year