Tax Deduction Wisdom - Should You Itemize?
Updated for Tax Year 2015
Learn whether itemizing your deductions makes sense, or if you should simply take the no-questions-asked standard deduction. The standard deduction is always easier, but for one out of every four taxpayers, itemizing pays off with a lower tax bill. Browse this quick tax deduction overview to avoid paying more taxes than you actually owe.
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Tax season pressure may tempt you to accept the standard tax deduction, rather than exploring the potential benefit of itemizing your deductions.
To figure out whether itemizing would be profitable for you, you need to determine whether the allowable expenses you
paid during the year – for things like home mortgage interest and property taxes, state income or sales taxes, medical expenses, charitable donations, etc.—exceed the standard deduction for your filing status. Here are the basic numbers to beat for 2015 returns:
- Standard deduction for single taxpayers - $6,300
- Standard deduction for married taxpayers filing a joint return - $12,600
- Standard deduction for head of household taxpayers - $9,250
Those are the numbers for most of us, but some people get even higher standard deductions. If you're 65 or older or blind, you get to increase your standard tax deduction by the amount listed below.Source: turbotax.intuit.com
Category: Personal Finance