People are always contemplating what they can write off on their taxes without taking the time to figure out if that makes the most sense for them. Everyone’s tax status is different, and sometimes it may make more sense to just take the standard deduction.
The standard deduction is always easier and quicker, but it’s not the best thing for everyone. For one out of four tax payers, itemization works out better and gets them a lower tax bill.
Whether it’s best for you to itemize or not depends on a few things. You must first figure out whether the allowable expenses you paid during the year exceed the standard deduction for your filing status. Things like home mortgage, interest and property taxes, state income taxes or sales taxes, medical expenses and charitable donations are some of the more common deductions. You should check with a professional to find out what your filing status and standard deduction is.
Some individuals who meet special criteria get a little higher standard deduction. If you’re 65 or older or blind you get more of a standard deduction. Again, check with a professional to find out the best and most up to date information.
If you own a home or have an equity loan, it’s a good idea to find out if itemization can save you money. Many taxpayers take the standard deduction rather than itemizing even though itemizing would have saved them money. To find out where you stand, fill out a schedule A and see if your itemized tax deduction is larger than the standard deduction to which you are entitled.
Make sure to check the state income taxes, medical bill and any charitable donations you may have made. These things add up and in some cases, could easily exceed that standard deduction for your filing status.
Before you just run out and file your taxes with the standard deduction, take the time to see if you can itemize instead. If you’re still not sure, see a professional.