The IRS released the latest draft version of the new Schedule A on July 10th. If you think this form will become obsolete with the increase of the standard deduction, you are not alone. Most tax preparers believe they will see very little of this form in the upcoming tax year. Mostly because they believe taxpayers will have less to itemize and it will be more beneficial for them to take the standard deduction. In some cases this may be true, but certainly not all.
Has the new Schedule A really changed that much? From first look the form is significantly shorter, cutting the 30-line page down to only 18. Much like the new Form 1040, most of the sections have been condensed into one-line parts, or lines with multiple sub-categories.
Here’s some key changes to the new Schedule A:
- The entire Job Expenses and Certain Miscellaneous Deductions section has been removed. These will not be supported moving forward.
- State and Local Taxes, Real Estate Taxes, and Personal Property Taxes will be combined together onto lines 5d. Taxpayers will be required to take the lesser of the amount on line 5d or $10,000 (or $5,000 for MFS).
- Home Mortgage Interest and Points will be combined onto one line.
- Casualty and Theft Losses may only be reported for Federally Declared Disaster Areas moving forward.
- Itemized Deductions are no longer limited by AGI on the Schedule A.