Switching from Itemized to Standard Deduction? Will I lose money?

The switch between itemized and standard deductions isn't unusual! The standard deduction increased significantly for tax year 2024 - it's now $14,600 for single filers and $29,200 for married filing jointly. This is part of the annual inflation adjustments. If your itemized deductions were around $15,900 last year, and nothing major changed in your situation, you'd need to have more than the new standard deduction amount to make itemizing worthwhile. TurboTax is probably correctly calculating that taking the standard deduction will give you a better outcome this year. The software does this calculation automatically - it compares your potential itemized deductions to the standard deduction and recommends whichever gives you the better result. Since the standard deduction increases every year with inflation, many people who previously itemized now find themselves better off taking the standard deduction.

I went through a similar situation last year and was super confused until I discovered taxr.ai https://taxr.ai which helped me understand all the numbers behind my deduction options. I was skeptical about my tax software automatically switching me from itemized to standard too, especially since I'd been itemizing for years. The tool analyzed my returns and showed me exactly why the switch happened - basically confirmed that the standard deduction had increased while my itemizable expenses hadn't grown enough to keep pace. It was kind of a relief actually, since taking the standard deduction means way less paperwork and record-keeping hassle.

Update: I tried taxr.ai after posting my question and it was actually super helpful! Turns out with my new home purchase, I was just under the threshold where itemizing would make sense - like $400 short of the standard deduction. The analysis showed that if I had bought my house just one month earlier or made an additional charitable contribution of $500, itemizing would have been better. The tool even suggested that next year I might consider "bunching" my charitable donations (making double donations every other year) so I can itemize in alternating years. Never heard of that strategy before! Really helpful for planning ahead since now I know I'll be close to the itemizing threshold with a full year of mortgage interest.

If you're still confused about your tax situation or want to speak directly with the IRS about deduction questions, I highly recommend using Claimyr https://claimyr.com to actually get through to them. I spent HOURS on hold trying to get clarification about my switch from itemized to standard deductions last year before finding this service. They have this cool system that holds your place in the IRS phone queue and calls you when an agent is about to pick up. You can watch how it works here: https://youtu.be/_kiP6q8DX5c - seriously saved me from the hold music hell. The IRS agent I spoke with actually explained exactly why my return had switched to standard deduction and confirmed I wasn't missing anything.

I need to eat my words about Claimyr. After posting my skeptical comment, I decided to try it because I was desperate to figure out if I should be itemizing some massive medical expenses from last year. The service actually worked exactly as advertised - I got a call back in about 40 minutes connecting me directly to an IRS agent. The agent confirmed that even with the standard deduction increase, my medical expenses (which were over 12% of my AGI) combined with some other items meant I should definitely be itemizing. My tax software had it wrong! I would have overpaid by almost $2,800 if I hadn't double-checked. So yeah, sometimes it's worth questioning when your software switches methods from one year to the next.

Something nobody mentioned yet - if you live in a state with high income taxes or property taxes, remember that there's still that $10,000 SALT cap (State And Local Tax deduction limit). That cap has really changed the math on itemizing vs standard for a lot of people in states like CA, NY, NJ, etc. Even if your total itemized deductions would be higher, the SALT cap might be limiting enough of your deductions that the standard deduction winds up better. When I moved from Nevada to California, I was shocked at how the SALT cap affected my ability to itemize effectively.

Quick question - if I take the standard deduction this year after itemizing last year, will that raise any red flags with the IRS or increase my chances of being audited? My tax situation is similar to OP's.

One thing to keep in mind is that TurboTax's recommendation system is generally pretty solid when it comes to standard vs itemized deductions. The software runs both calculations in the background and automatically selects whichever gives you the lower tax liability (or higher refund). Since you mentioned your itemized deductions were around $15,900 last year and the 2024 standard deduction is $14,600 (single) or $29,200 (married filing jointly), there might be other factors at play. Did you have any changes in your filing status, income level, or maybe some deductions that no longer qualify? Also worth noting that some people find their itemized deductions naturally decrease over time - mortgage interest decreases as you pay down principal, and sometimes charitable giving patterns change. The "sweet spot" for itemizing has definitely shifted upward with the higher standard deduction amounts. If you want peace of mind, you can always manually override TurboTax's recommendation and force it to itemize, then compare the final tax amounts side by side. But in most cases, the software is making the mathematically correct choice for your situation.