Am I Required to Take Deductions

[karnut2005]

Greetings,

Thought I'd try to estimate my 2020 federal taxes. I'm using the tax computation worksheet and find that if I take all of my deductions, I fall just below the cutoff that separates two income ranges. If I don't take one of my deductions, I fall just above the cutoff (i.e., in the higher income range) and end up owing less tax.

So, my question is: Am I required to take deductions on my federal tax return? I might want to eliminate one.

Tried Google to no avail.

Thanks,

karnut

[adjusterjack]

Itemized deductions are allowed but not mandatory.

[llworking]

Itemized deductions are allowed but not mandatory.

I agree, but I am having trouble picturing a scenario where below the cutoff for an income range would result in more tax owed than above the cutoff for an income range...unless somehow AMT is involved...and even then, AMT would not normally do that.

[karnut2005]

Well, I thought I wrote replies to the first two respondents individually, but poof. I'll try to summarize.

Apologies for being unclear. I did not mean itemized deductions but deductions such as the Qualified Business Income Deduction or, for that matter, the Standard Deduction.

In my case, if I'm calculating correctly, there's an in-my favor difference at the margins between A% (of taxable income) minus $B, and C% minus $D, so that if I'm just north of the boundary my tax is less. My deduction decreases and my income moves (barely) into the next tier, but my tax decreases. Or so it appears.

Note that the percentages and dollar values are rigid, i.e., they do not vary within an income bracket. In my case, getting just over the line results in a lower tax liability.

Let me ask my question this way: Can a person choose not to take a deduction like, say, the Standard Deduction. Seems to me that a person could, but I'd rather know for sure and maybe avoid having to interact with the IRS down the road.

[adjusterjack]

Here's your answer straight from the horse's mouth:

"Electing to itemize for state tax or other purposes.Even if your itemized deductions are less than your standard deduction, you can elect to itemize deductions on your federal re-turn rather than take the standard deduction. You may want to do this if, for example, the tax benefit of itemizing your deductions on your state tax return is greater than the tax benefit you lose on your federal return by not taking the standard deduction. To make this election, you must check the box on line 18 of Schedule A."

From Page 156 of IRS Publication 17:

https://www.irs.gov/pub/irs-pdf/p17.pdf

[llworking]

Here's your answer straight from the horse's mouth:

"Electing to itemize for state tax or other purposes.Even if your itemized deductions are less than your standard deduction, you can elect to itemize deductions on your federal re-turn rather than take the standard deduction. You may want to do this if, for example, the tax benefit of itemizing your deductions on your state tax return is greater than the tax benefit you lose on your federal return by not taking the standard deduction. To make this election, you must check the box on line 18 of Schedule A."

From Page 156 of IRS Publication 17:

https://www.irs.gov/pub/irs-pdf/p17.pdf

He can certainly see what happens if he itemizes instead of taking the Standard Deduction. However, if he doesn't take the QBI he ups his self employment tax so not taking that would certainly not be to his benefit.

[karnut2005]

So, looks like I could (for example) zero-out the Standard Deduction if I wanted (I don't, but the SD seems the best way to illustration my question). Or, I could pick and choose deductions within, say, those included in the Qualified Business Income Deduction. I don't see why the IRS would object if a person ignores deductions that increase his taxable income, even if it ultimately lowers his tax.

Many thanks to all who replied to my Q. Has certainly helped me clarify my muddled thinking on this issue.

[llworking]

So, looks like I could (for example) zero-out the Standard Deduction if I wanted (I don't, but the SD seems the best way to illustration my question). Or, I could pick and choose deductions within, say, those included in the Qualified Business Income Deduction. I don't see why the IRS would object if a person ignores deductions that increase his taxable income, even if it ultimately lowers his tax.

Many thanks to all who replied to my Q. Has certainly helped me clarify my muddled thinking on this issue.

I have been a tax professional for more than 30 years. I will say again, that I cannot imagine a scenario where not taking a deduction would result in you owing less tax.