Like others across the country, St. Louis residents work to figure out how to save the most money possible on their taxes every year. Before the recent changes in the tax law, this meant looking for as many deductions as possible. However, after the recent changes, getting those deductions over the standard deduction could prove problematic for many people.
For the 2019 tax year, the standard deduction for single people is $12,200 and $24,400 for married couples filing jointly. It could be more for people with special circumstances, such as seniors or those claiming head of household. In each situation, the amount is higher than it was for the 2018 tax year.
This means that even homeowners who would ordinarily claim the interest on their mortgage loans could have a hard time beating the standard deduction, especially since there is now a cap on how much interest they can claim depending on the amount of the debt owed. The limit used to be $1 million, but the new law reduced that amount to $750,000. Moreover, if a married couple files separate returns, the amount is cut in half. State deductions for personal property, state and local real estate, and income taxes are also capped at just $10,000.
Just these two limitations could make it better for St. Louis taxpayers to use the standard deduction instead of itemizing. In some ways, this makes it easier for people to do their taxes since they do not have to worry about maximizing their deductions. One way to know for sure which way would work out better in an individual’s unique situation would be to consult with a tax attorney who can help determine the strategy that provides the best possible outcome.