Differences in itemizing, standard deductions will do nothing to help most taxpayers in Maryland
President Donald Trump’s tax bill lowered taxes for everyone by lowering tax rates, and greatly simplified tax filing overall for most by eliminating some deductions and raising the standard deduction.
So, most people will not itemize federal tax deductions but take the new higher standard deduction. For example, for a married couple filing jointly, the standard federal deduction for 2018 will be $24,000. If both are 65 or older, the standard deduction will be $26,600.
Maryland tax law does not allow itemizing deductions unless you first itemize federal. Gov. Larry Hogan (R) and the minority Republicans in the state legislature wanted to “hold Marylanders harmless” by allowing Marylanders to itemize on 2018 Maryland taxes even if they do not itemize federal, but since Maryland’s legislature is controlled by liberal tax-and-spend Democrats, this was not changed. Instead, they raised the Maryland standard deduction from $4,000 to $4,500 for a married couple filing jointly and crowed about how they lowered your taxes. It’s just a smoke screen.
Those Maryland tax filers having itemized deductions between $4,500 and $24,000 ($26,600 if older than 65) will not be able to itemize Maryland taxes because they will not itemize federal, and be required to take the $4,500 standard deduction.
They will pay significantly more in 2018 Maryland taxes, hundreds more.
For example, if a joint filing couple has $17,000 in itemized deductions (medical, charity, mortgage, real estate taxes) and they are in the combined 8 percent bracket (state 5 percent, local 3 percent), they will pay $1,000 more when filing 2018 taxes (8 percent of $12,500 above the $4,500 standard deduction).
The circumstances for all taxpayers are different, so you can come up with your own example. But beware to those who can no longer itemize.
Your 2018 Maryland taxes are going up significantly, thanks to the Democratic-controlled Maryland legislature.
Even for those who have never itemized, increasing the standard deduction by $500 for that couple in the 8 percent bracket will save $40 a year — or less than 77 cents a week. Big deal.
Joe Wible Sr., Leonardtown