In: Accounting
Paul and Sonja, who are married, reported 2018 itemized deductions of $13,200 and $400, respectively. Paul suggests that they file their Federal income tax returns separately—he will itemize his deductions from AGI, and she will claim the standard deduction.
a. Evaluate Paul’s suggestion.
b. What should they do?
a.
If either spouse itemizes deductions from AGI, the other spouse also must itemize. Consequently, Paul’s suggestion is not proper.
b.
Presuming that they file separately and itemize, their total deduction is $13,600 ($13,200 + $400). If they claim the standard deduction, $24,000 ($12,000 + $12,000) is allowed. The same result takes place on a joint return. For tax purposes, therefore, the standard deduction is the better choice.
a. Paul’s suggestion is not proper.
b. For tax purposes, therefore, the standard deduction is the better choice.