My Refund Amount Does Not Change When I Enter Deductions
TurboTax wants to make sure you get the biggest refund possible, so it starts off using the standard deduction. This is determined by your filing status (see below). Thus, until your itemized deductions are higher than your standard deduction, your refund will not change. Once your itemized deduction entries add up to your standard deduction amount, your refund will change a little at a time as your deductions increase over the standard amount.
For 2012, the standard deduction amounts are:
- Single $5,950 + 1,450 for each person over 65
- Head of Household (HoH) $8,700 + 1,450 for each person over 65
- Married Filing Separately (MFS) $5,950 + 1,150 for each person over 65
- Married Filing Jointly (MFJ) $11,900 + 1,150 for each person over 65
However, as your deduction amount increases your income amount decreases, and you may end up not getting as many credits as before. The Earned Income Credit is just one example of a credit that is dependent upon your income amount. After you reduce your income to zero (if you have lots of deductions), there is no more refund to get back. Once you have entered everything into TurboTax, check your refund monitor. You can always go back and change from the standard to the itemized deduction method (and vice versa) if you think one is more advantageous for you than the other. Learn more
If you are able to itemize deductions (when your deductions exceed the standard deduction) you just get a percentage of your deductions back.
For example: when you are in the 25% tax bracket, for a $100 deduction your income would be reduced by about $25. Itemized deductions reduce your income so you get taxed on a lower amount.