Matthew Jensen,
July 1, 2024
The Tax Cuts and Jobs Act Reduced Tax Itemization Complexity and Improved Data Security Across All 50 States
Context
The Tax Cuts and Jobs Act of 2017 (TCJA) contained numerous provisions that simplified the tax code, such as nearly doubling the standard deduction and improving taxpayer data security by the IRS requiring less information from taxpayers. The changes combined dramatically reduced the number of taxpayers who itemize their tax returns. Itemization increases tax complexity for filers by requiring additional information and reporting and exposes them to the risks of more damaging IRS hacks and leaks.
TCJA Provisions That Decreased Itemization
- From 2017–2018, the standard deduction increased $6,500 to $12,000 for individual filers, $13,000 to $24,000 for joint returns, and $9,550 to $18,000 for heads of households.
- The previously open-ended deduction for state and local real estate, personal property, and either income or sales taxes was capped at $10,000.
- Limits for mortgage interest and medical expenses were tightened while other deductions, such as for tax preparation fees, were eliminated.
Reduction in the number of itemizers from 2017–2018 |
Ohio |
Illinois |
Georgia |
USA |
1.1m fewer itemizers (75% reduction) |
1.3m fewer itemizers (65% reduction) |
906k fewer itemizers (59% reduction) |
29.5m fewer itemizers (63% reduction) |
Summary
- A clear way to see the effect of TCJA on taxpayer itemization is to examine the change in the number of itemizers from 2017–2018, the years before and after TCJA was enacted. In this OFRA Local Impact Table, relying on data from the Internal Revenue Service’s Statistics of Income Division, we overview the change in the number of itemized returns for all 50 states.
Local Impact Table |
||||
State |
Itemized Returns, 2017 |
Itemized Returns, 2018 |
Change (#) |
Change (%) |
AK |
80,370 |
26,740 |
-53,630 |
-67% |
AL |
550,270 |
176,280 |
-373,990 |
-68% |
AR |
281,230 |
85,660 |
-195,570 |
-70% |
AZ |
900,630 |
338,790 |
-561,840 |
-62% |
CA |
6,464,850 |
3,215,470 |
-3,249,380 |
-50% |
CO |
912,340 |
373,260 |
-539,080 |
-59% |
CT |
737,660 |
267,920 |
-469,740 |
-64% |
DC |
142,460 |
77,950 |
-64,510 |
-45% |
DE |
152,710 |
55,110 |
-97,600 |
-64% |
FL |
2,663,020 |
923,050 |
-1,739,970 |
-65% |
GA |
1,540,950 |
634,240 |
-906,710 |
-59% |
HI |
211,830 |
96,780 |
-115,050 |
-54% |
IA |
448,780 |
109,810 |
-338,970 |
-76% |
ID |
224,380 |
70,110 |
-154,270 |
-69% |
IL |
1,992,020 |
688,660 |
-1,303,360 |
-65% |
IN |
724,760 |
192,070 |
-532,690 |
-73% |
KS |
349,670 |
108,350 |
-241,320 |
-69% |
KY |
511,760 |
126,470 |
-385,290 |
-75% |
LA |
480,540 |
152,230 |
-328,310 |
-68% |
MA |
1,306,310 |
513,360 |
-792,950 |
-61% |
MD |
1,393,890 |
722,050 |
-671,840 |
-48% |
ME |
180,730 |
49,060 |
-131,670 |
-73% |
MI |
1,303,830 |
365,010 |
-938,820 |
-72% |
MN |
983,490 |
314,640 |
-668,850 |
-68% |
MO |
751,150 |
217,710 |
-533,440 |
-71% |
MS |
301,760 |
94,140 |
-207,620 |
-69% |
MT |
150,320 |
45,570 |
-104,750 |
-70% |
NC |
1,336,180 |
477,150 |
-859,030 |
-64% |
ND |
71,950 |
20,220 |
-51,730 |
-72% |
NE |
255,410 |
69,390 |
-186,020 |
-73% |
NH |
225,240 |
70,600 |
-154,640 |
-69% |
NJ |
1,874,490 |
757,410 |
-1,117,080 |
-60% |
NM |
209,960 |
67,680 |
-142,280 |
-68% |
NV |
377,330 |
143,330 |
-234,000 |
-62% |
NY |
3,427,800 |
1,211,470 |
-2,216,330 |
-65% |
OH |
1,480,500 |
376,580 |
-1,103,920 |
-75% |
OK |
387,950 |
133,400 |
-254,550 |
-66% |
OR |
727,520 |
286,450 |
-441,070 |
-61% |
PA |
1,820,600 |
555,110 |
-1,265,490 |
-70% |
RI |
178,920 |
57,380 |
-121,540 |
-68% |
SC |
629,410 |
216,040 |
-413,370 |
-66% |
SD |
76,470 |
22,160 |
-54,310 |
-71% |
TN |
614,950 |
204,370 |
-410,580 |
-67% |
TX |
3,273,540 |
1,163,000 |
-2,110,540 |
-64% |
US |
47,103,650 |
17,599,150 |
-29,504,500 |
-63% |
UT |
480,760 |
201,750 |
-279,010 |
-58% |
VA |
1,507,430 |
705,660 |
-801,770 |
-53% |
VT |
91,350 |
23,490 |
-67,860 |
-74% |
WA |
1,121,590 |
486,560 |
-635,030 |
-57% |
WI |
912,290 |
223,530 |
-688,760 |
-75% |
WV |
133,560 |
33,060 |
-100,500 |
-75% |
WY |
60,280 |
17,640 |
-42,640 |
-71% |