01/22/2020
To itemize or not to itemize your deductions for taxes: The Tax Cuts and Jobs Act (TCJA) brought many changes to our tax system and was the largest Tax Code overhaul in decades. One of the new provisions is a larger than life Standard Deduction for all three groups, Single Individual, Married filing jointly as well as Head of Household. Due to the high threshold you have to cross in order to itemize, it is easy to think that your return will be simpler and you should not even think about itemizing at all, just submit your income documents and be done with it, right?
The truth is that nothing could be further from the truth than this statement. Every tax document that you receive is important and must be saved with your Tax Income Documents for your well educated Tax Preparer to consider because you file not one return only, but TWO. The state of California have conformed to almost NOTHING that changed on the Federal Return therefore creating two returns to two entities that are further apart than they have ever been. The result is that while the Federal return might be slightly less complex it is necessary to determine whether you will benefit from Itemizing on your CA State return separately from the Federal return. The standard deduction for the CA return is around $4,ooo for the Individual and around $8,ooo for the Married couple filing a joint return.
The debate and court cases with reference to the Individual Mandate that was introduced by the Affordable Care Act (ACA) have not been finalized yet either, but one thing is certain: If the Federal Income Tax laws cancels the charging of a penalty for individuals who does not have Qualified Medical Insurance, then California will quickly pick up the penalty to generate some Tax Income.
