NCPA - National Center for Policy Analysis

Some Nonitemizers Overpay Taxes

April 16, 2001

When computing their federal taxes, taxpayers either claim a standard deduction or itemize deductions, which are subtracted from adjusted gross income in determining taxable income.

In recent years, approximately 70 percent of taxpayers have claimed the standard deduction, while the remaining 30 percent have itemized.

But a new General Accounting Office report requested by U.S. House Majority Leader Dick Armey (R-Texas) estimates that a number of taxpayers are overpaying their income taxes by not itemizing deductions.

  • On the mortgage interest deduction alone, according to the preliminary report, the GAO estimated that on about 510,000 tax year 1998 individual tax returns, 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 overpaid their taxes by more than $500.

Source: "Tax Deductions: Estimates of Taxpayers Who May Have Overpaid Federal Taxes by Not Itemizing," April 2001, GAO-01-529, General Accounting Office.

For GAO report


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