Each year taxpayers have the choice to take a standard deduction or to itemize their deductible expenses. This is usually a pretty simple decision. If your itemized expenses exceed the standard deduction for your filing status, complete schedule A and deduct the itemized amount.
For residents of Georgia (and possibly other states), the state’s standard deduction has largely remained constant with little or no adjustment for inflation. This creates a widening gap between the federal and state amounts for standard deductions. A Georgia resident who itemizes on their federal return must itemize on their Georgia return and taxpayers who take the standard deduction must also take the Georgia standard deduction. The quirk is that while Georgia allows 100% percent of the itemized deduction to reduce Georgia’s taxable income, Georgia only gives a standard deduction that amounts to one-quarter of federal deductions for most filing statuses (Single taxpayers are afforded about 40% of the federal amount).
This means that some taxpayers whose itemized deductions exceed the state but fall short of the federal standard deductions may save a few dollars by taking the smaller itemized deduction in lieu of the federal standard deduction.
The following chart shows the ‘break-even’ points at which residents of Georgia may prefer to itemize for each filing status and federal tax rate. The chart assumes a flat 6% rate for Georgia taxes and disregards any additional deduction for age or blindness.
For residents of Georgia (and possibly other states), the state’s standard deduction has largely remained constant with little or no adjustment for inflation. This creates a widening gap between the federal and state amounts for standard deductions. A Georgia resident who itemizes on their federal return must itemize on their Georgia return and taxpayers who take the standard deduction must also take the Georgia standard deduction. The quirk is that while Georgia allows 100% percent of the itemized deduction to reduce Georgia’s taxable income, Georgia only gives a standard deduction that amounts to one-quarter of federal deductions for most filing statuses (Single taxpayers are afforded about 40% of the federal amount).
This means that some taxpayers whose itemized deductions exceed the state but fall short of the federal standard deductions may save a few dollars by taking the smaller itemized deduction in lieu of the federal standard deduction.
The following chart shows the ‘break-even’ points at which residents of Georgia may prefer to itemize for each filing status and federal tax rate. The chart assumes a flat 6% rate for Georgia taxes and disregards any additional deduction for age or blindness.
Federal Rate - Dollar Amount (rounded to nearest dollar)
Single ($5,700 Fed - $2,300 State standard deductions)
10% - $4,425
15% - $4,729
25% - $5,042
28% - $5,100
33% - $5,177
35% - $5,202
MFS ($5,700 Fed - $1,500 State standard deductions)
10% - $4,125
15% - $4,500
25% - $4,887
28% - $4,959
33% - $5,054
35% - $5,085
MFJ ($11,400 Fed - $3,000 State standard deductions)
10% - $8,250
15% - $9,000
25% - $9,774
28% - $9,918
33% - $10,108
35% - $10,171
HOH ($8,350 Fed - $2,300 State standard deductions)
10% - $6,075
15% - $6,621
25% - $7,179
28% - $7,282
33% - $7,419
35% - $7,464
Tax software makes this easy to see which method is more advantageous. If you have any questions, you should contact a tax professional.
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