Itemized Deductions: Which Is Better? Standard Deduction vs. OVERVIEW The pressure of a looming tax deadline may make it easier to take the standard deduction rather than itemize your deductions, but you should weigh this question carefully.
Standard deduction vs. Do you own a home? Do you pay state and local taxes? Just about everyone pays some form of state and local taxes. These include: Real estate taxes. If you pay your real estate taxes through an escrow account, look at the real estate taxes shown on Form or the year-end tax summary your lender provided. If your real estate taxes aren't paid through an escrow account, review your property tax bills or canceled checks and add up what you paid.
State and local income taxes. Don't forget to add any money you sent with your prior-year state or local tax return. Sales tax. You're allowed to either deduct actual sales tax paid on all of your purchases throughout the year which requires a lot of record-keeping or an estimate of what you paid based on your income level and your local sales tax rate.
You can estimate your sales tax deduction using the IRS's , or let TurboTax take care of the calculation for you. You can add to this estimate any sales tax you paid on big-ticket items, such as a new vehicle, boat, RV, or major home renovation.
Personal property taxes. A portion of your annual car registration may be deductible. To qualify, the tax has to be based on the vehicle's value. You can usually find this on your registration or renewal notice. Did you donate to charity? Did you have any out-of-pocket medical expenses?
The list of deductible medical expenses is long, but some of the more common ones include: Doctor and dentist fees Chiropractor fees Glasses and contact lenses Lab fees Long-term care expenses Medical supplies Prescription medications You can also deduct the premiums you pay for health, dental, and vision insurance unless you pay for your coverage through your employer using pretax dollars.
Do you live in a federally declared disaster area? To qualify: The federal government must declare the region a disaster area. Do you have any miscellaneous itemized deductions?
You may be able to deduct a few miscellaneous expenses, but they're not common. Still, a few miscellaneous itemized deductions are available, including: Amortizable bond premiums. The amount over face value, or premium, that you pay for certain taxable bonds because they're paying higher-than-current-market interest rates.
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Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. Bankrate follows a strict editorial policy, so you can trust that our content is honest and accurate. Itemizing requires you to keep receipts throughout the year.
You also need to keep those receipts after you file just in case of an audit. For most people, there is a balance between the work required to itemize and the amount you save by itemizing. Generally speaking, itemizing is a good idea if the value of your itemized expenses is more than the value of the standard deduction. Because the new tax plan nearly doubled the standard deduction for the tax year when compared with before it went into effect, some people who itemized their taxes will not benefit from itemizing their taxes.
Even if itemizing would save you more than the standard deduction, consider the amount of time and energy that also goes with itemizing. Her success is attributed to being able to interpret tax laws and help clients better understand them. Lisa also has been a TurboTax product user for many years and understands how the software program works. In addition to extensive tax experience, Lisa also has a very well-rounded professional background. She has held positions as a public auditor, controller, and operations manager.
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