Standard vs Itemized Deductions
There are two ways you can take deductions on your federal income tax return: you can itemize deductions or use the standard deduction. Deductions reduce the amount of your taxable income. Consider using the method that gives you the lower tax. Due to tax law changes in the last couple of years, if you itemized in the past, you might not want to continue to do so, so it’s important for you to identify all deductions to report on your income tax return.
Here are some details about the two methods to help you understand which will benefit you the most:
The standard deduction amount adjusts every year and can vary by filing status. The standard deduction amount depends on the taxpayer’s filing status, whether they are 65 or older or blind, and whether another taxpayer can claim them as a dependent. Taxpayers who are age 65 or older on the last day of the year and don’t itemize deductions are entitled to a higher standard deduction.
Taxpayers who can’t use the standard deduction include:
Taxpayers may need to itemize deductions because they cannot use the standard deduction. They may also itemize deductions when this amount is greater than their standard deduction.
A taxpayer may benefit by itemizing deductions for things that include:
If you would like help in determining the best option for your individual tax planning needs, please call our office at