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Itemizing vs. Standard Deduction: Six Tips to Help You Choose

3/10/2014

 
When you file your tax return, you usually have a choice whether to itemize deductions or take the standard deduction.  Before you choose, it’s a good idea to figure your deductions using both methods.  Then choose the one that allows you to pay the lower amount of tax.  The one that results in the higher deduction amount often gives you the most benefit.

The IRS offers these six tips to help you choose.

1.  Figure your itemized deductions.  Add up deductible expenses you paid during the year.  These may include expenses such as:
  • Home mortgage interest
  • State and local income taxes or sales taxes (but not both)
  • Real estate and personal property taxes
  • Gifts to charities
  • Casualty or theft losses
  • Unreimbursed medical expenses
  • Unreimbursed employee business expenses


Special rules and limits apply. Visit IRS.gov and refer to Publication 17, Your Federal Income Tax for more details.

2.  Know your standard deduction.   If you don’t itemize, your basic standard deduction for 2013 depends on your filing status:
  • Single $6,100
  • Married Filing Jointly $12,200
  • Head of Household $8,950
  • Married Filing Separately $6,100
  • Qualifying Widow(er) $12,200

Your standard deduction is higher if you’re 65 or older or blind.  If someone can claim you as a dependent, that can limit the amount of your deduction.

3.  Check the exceptions.  Some people don’t qualify for the standard deduction and therefore should itemize.  This includes married couples who file separate returns and one spouse itemizes.

4.  Use the IRS’s ITA tool.  Visit IRS.gov and use the Interactive Tax Assistant tool to help determine your standard deduction.

5.  File the right forms.  To itemize your deductions, use Form 1040 and Schedule A, Itemized Deductions.  You can take the standard deduction on Forms 1040, 1040A or 1040EZ.

6.  File Electronically.  You may be eligible for free, brand-name software to prepare and e-file your tax return. IRS Free File will do the work for you.  Free File software will help you determine if you should itemize and file the right tax forms.  It will do the math and e-file your return – all for free.  Otherwise, you may file electronically with commercial software, or through a paid preparer.

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  • Home
  • About
    • Book An Appointment
  • Accounting
    • Dashboard
    • Xero+Accountency
    • Xero Intro
    • AutoMagical Accounting
    • QuickBooks >
      • QuickBooks Updates
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    • Dashboard
    • Individuals
    • Businesses
    • Tax Stuff >
      • Individuals >
        • Income >
          • Debt Forgiveness
          • Foreign Income
          • Gambling Income
          • Unemployment
          • Other Income
        • Deductions & Credits >
          • Adoption
          • Charitable Contributions
          • Earned Income Tax Credit
          • Educational Expenses
          • Energy Tax Credits
          • Employee Business Expenses
          • Other Deductions and Credits
        • Affordable Care Act - Individuals
        • Children and Dependents
        • Death
        • Disabled Taxpayers
        • Educators
        • Health Care
        • Identify Theft
        • Marriage and Divorce
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        • Who Must File
        • Other Topics
      • Businesses >
        • Affordable Care Act - Businesses
        • Year-end Reporting Obligations >
          • 1099's
          • Health Insurance Premiums
          • Depreciation
          • Reimbursed Employee Business Expenses
          • Company Automobiles
        • Employment Tax Credits
        • Independent Contractors
        • Tax Credits and Deductions for Businesses
        • Other Business Topics
        • Required Business Posters
      • Amended Returns
      • IRS Notices and Problems
      • Tax Plan >
        • All About the Earned Income Tax Credit
        • 5 IRS Audit Red Flags
        • Retirement Plans for Sole Proprietors
        • Are You Claiming All of Your Tax-Deductable Business Expenses for 2015?
        • All About Past Due Tax Returns
        • Do You Need to File Form 1099s?
        • How to File an Appeal with the IRS
        • Why You Might Get a Letter from the IRS, and What to Do
        • How to File an Amended Tax Return
        • Should You Claim the Home Office Deduction?
        • How to Avoid -- And Deal with -- Identify Theft
        • Q & A: IRS Audits
        • Are You Using the Right Business Structure?
        • Starting Planning for 2015 Income Taxes Now: 5 Tips
        • What You Need to Know About Estimated Taxes
        • Contractor or Employee? How the Income Tax Obligations Differ
        • The New Form 1095-A: Reporting Health Insurance Coverage
        • Are Your Social Security Payments Taxable?
        • Do You Qualify for the Earned Income Tax Credit?
        • Are You Eligible for Health Insurance Tax Credits
        • Employee Retirement Plans - Tax Advantages and Other Benefits
        • 5 Business Tax Credits You May Be Missing
        • New Business in 2012
        • Is it a Bad Debt or a Simple Revenue Loss? Telling the Difference
        • Business Taxes Add Complexity: How Will This Affect You?
      • Tax Scams