Posts Tagged ‘standard deduction’

Should You Use the Standard or Itemized Deduction?

Tuesday, January 11th, 2022

The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice. 

There are certain expenses that most taxpayers have every year that qualify as a deduction from your total income on your tax returns.  The resulting calculation becomes an integral component of the tax return that defines your taxable income.  It is the taxable income amount that is used to calculate your state or Federal income taxes.  Additionally, the income tax laws provide a “standard deduction” for taxpayers who do not itemize, or where the taxpayer’s itemized deductions do not meet a certain threshold.  Important – Taxpayers are entitled to use the HIGHER amount in the calculation of their tax liability, their “Itemized Deductions” or the “Standard Deduction”!


Standard Deduction or Itemized Deductions?

Monday, February 22nd, 2021

The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice. 

Tax return deductions reduce the amount of taxable income when filing a Federal or state income tax return. In other words, using these deductions can reduce the amount of taxes that a taxpayer owes.

In most cases, taxpayers have a choice or option of either taking the “standard deduction” or “itemizing” their deductions. The standard deduction may be quicker and easier, but, itemizing your deductions may lower your income taxes more, in some situations. It’s important for all taxpayers to look into which deduction method is best before they file their income tax returns.

New this year
Following tax law changes, cash donations of up to $300 made by December 31, 2020 are deductible without having to itemize when people file a 2020 tax return.

Read more on this post:

Should You Itemize or Utilize The Standard Deduction??

Monday, March 5th, 2012

The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice.

This is an important decision to make each year, but there are several important requirements that have to be met throughout the year if you wish to have this choice.  A major consideration is adequate “record keeping”.  IRS Publication 552 provides some excellent guidelines for this requirement:   Additionally, the below information should be considered: 

You cannot use the standard deduction if:

  • You are married and filing a separate return, and your spouse itemizes deductions
  • You are a nonresident alien or a dual-status alien during the year, or
  • You are filing a tax return for a period of less than 12 months because of a change in your annual accounting method

In addition an estate or trust, common trust fund, or partnership cannot use the standard deduction. For additional information, refer to Publication 501, Exemptions, Standard Deduction, and Filing Information.

You may benefit from itemizing your deductions on Schedule A if you:

  • Cannot use the standard deduction
  • Had large uninsured medical and dental expenses
  • Paid interest or taxes on your home
  • Had large unreimbursed employee business expenses
  • Had large uninsured casualty or theft losses, or
  • Made large charitable contributions


Standard or Itemized Deductions??

Wednesday, March 10th, 2010

This is the time of year when most Americans are becoming more actively engaged in the preparation of their individual Federal income tax returns.  While there are not many options available for reporting income, there could be some opportunities to reduce your taxable income (and directly related income taxes) by carefully reviewing the instructions for the completion of Schedule A (Itemized Deductions) for Federal form 1040.  While there are variances from state to state, most states either allow the same deductions as provided by Federal laws or they require various adjustments.  You can obtain specific details for your Federal tax return deductions by reading the instructions for Schedule A  on the IRS website: 

There are seven major categories:  1)  Medical and Dental Expenses, 2) Taxes You Paid,  3) Interest You Paid, 4)  Gifts to Charity, 5) Casualty and Theft Losses, 6) Job Expenses and Miscellaneous Deductions, and 7) Other Miscellaneous Deductions.

You will only realize a tax benefit from those total medical expenses that are greater that 7 1/2% of your total income (Adjusted Gross Income).  There is a deduction for state and local income taxes for those states that do not have a state income tax (i.e. Florida and Texas).  If you have all of your receipts to document your deductions, you have the option to use either the amounts from the IRS tables or the actual total amount from your receipts.  Large ticket (cost) items such as cars, boats, airplanes, recreational vehicles, etc are additions to the IRS tables.  If you own a home, in addition to your mortgage interest don’t forget to deduct any points that were paid (this amount is usually provided on the Form 1098 that you receive from your mortgage company) plus Mortgage Insurance Premiums (PMI) paid for homes purchased after December 31, 2006.  PMI is required if you had less than 20% equity in your home when you purchased or re-financed it. 

If you and your spouse paid expenses jointly and are filing separate tax returns you should review IRS Publication 504 for guidance on the allocation of these expenses.  Additional information on itemizing deductions from the IRS follows: