Save and Invest

Unsure whether to take the standard deduction on your taxes? Here's how to decide

A woman does paperwork at her computer.

Some 70% of taxpayers took the standard deduction in recent years, according to the Urban-Brookings Tax Policy Center, and the 2017 Tax Cuts and Jobs Act (TCJA) now makes that option even more attractive for most taxpayers, experts say.

The standard deduction is basically double what it was last year: It increased from $6,350 to $12,000 for most single filers, and from $12,700 to $24,000 for married couples filing jointly. At the same time, certain itemized deductions, like the mortgage interest deduction and the state and local taxes deduction (SALT), were capped or eliminated altogether.

Additionally, the TCJA eliminated personal and dependent exemptions — $4,050 for yourself, your spouse and each of your dependents — and increased the child tax credit.

To figure out whether or not you should still itemize, you have to do your homework, Jackie Perlman, principal tax research analyst at The Tax Institute at H&R Block, tells CNBC Make It.

"At least for this first year, you want to add it all up and see where you stand, and you might be surprised," says Perlman. "There's no short cut. You've got to have good records and you have to do the math."

How to tell if you should itemize

Itemizing typically makes the most sense for homeowners, says Perlman, and that's still true this year, though the SALT deduction is now capped at $10,000. Other deductions to take into account include the qualified mortgage interest, charitable gifts and health care expenses, San Antonio-based financial advisor Ben Gurwitz tells CNBC Make It.

"If you don't own a home, pay a lot of SALT or give to charity, or really all three, it is unlikely you will benefit from itemizing," says Gurwitz.

At least for this first year, you want to add it all up and see where you stand, and you might be surprised.
Jackie Perlman
analyst at The Tax Institute at H&R Block

If you typically itemize, you can run a quick calculation to see if it's still the right call this year: Grab your returns from 2016 or 2017, and see if your deductions added up to more than $12,000 if you're single, or $24,000 if you're filing jointly. If you're circumstances have changed, it might not be 100% accurate, but you can still ballpark your itemized deductions.

"It's always a good idea to see what you did last year for a lot of reasons, it's not a bad idea, but I wouldn't just take it at face value," says Perlman. Think through things that changed in the past year. Maybe you got a raise or made a large charitable contribution. Maybe your real estate taxes went up or you were the victim of a natural disaster.

Another time to consider it, Perlman says, is if you're a high earner.

"It could just be that you have a well-paying job and you live in a state with high state taxes and paid a lot in state taxes, that alone can get you over the hurdle even without owning a home," she says.

The standard deduction makes sense for most filers

Overall, though, experts say, the standard deduction is the most attractive option for most filers, even if you've itemized in the past.

"The standard deduction is so high," Cari Weston, CPA and director of tax practice and ethics at the CPA institute, told CNBC. "You might not itemize in the future if you were itemizing before."

Young people who likely have lower salaries and renters, in particular, will get more value from taking the standard deduction.

Still, Perlman says, even single people should do their homework to ensure they're not leaving money on the table. Tax software like TurboTax or Credit Karma can calculate which method is best for you, requiring you to simply answer all of the prompts it provides. That can take out some of the guesswork.

Don't miss: The average tax refund this year is nearly $3,000—here are the smartest ways to spend it

Like this story? Subscribe to CNBC Make It on YouTube!

Here's what happens if you don't pay your taxes
Here's what happens if you don't pay your taxes