Tax Deductions: Estimates of Taxpayers Who May Have Overpaid Federal Taxes by Not Itemizing

When computing their federal taxes, taxpayers either claim a standard deduction or itemize deductions. This report estimates (1) the number of taxpayers who may have overpaid their taxes by claiming the standard deduction instead of itemizing their deductions, and (2) the amount of taxes they may have overpaid. On about 510,000 individual tax returns in tax year 1998, GAO found that taxpayers did not itemize their deductions yet had mortgage interest payments that exceeded the standard deduction amount for their tax filing status. These taxpayers may have overpaid their taxes by about $311 million. The average overpayment amount was $610, and about 35 percent of the taxpayers had overpaid their taxes by more than $500.