Wondering to Itemize or Use the Standard Deduction

Income Tax Service For Individuals - Most people claim the standard deduction when they file their federal tax return, but you may be able to lower your tax bill if you itemize. You can find out which way saves you the most by figuring your taxes both ways.  

1. Figure Your Itemized Deductions. Add up deductible expenses you paid during the year. These may include expenses such as:

·         Home mortgage interest

·         State and local income taxes or sales taxes (but not both)

·         Real estate and personal property taxes

·         Gifts to charities

·         Casualty or theft losses

·         Unreimbursed medical expenses

·         Unreimbursed employee business expenses

Special rules and limits apply.

2. Know Your Standard Deduction. If you don’t itemize, your basic standard deduction for 2015 depends on your filing status:    

·         Single $6,300

·         Married Filing Jointly $12,600

·         Head of Household $9,250

·         Married Filing Separately $6,300

·         Qualifying Widow(er) $12,600     

If you’re 65 or older or blind, your standard deduction is higher than these amounts. If someone can claim you as a dependent, your deduction may be limited.

3. Check the Exceptions. There are some situations where the law does not allow a person to claim the standard deduction. This rule applies if you are married filing a separate return and your spouse itemizes. In this case, you can’t claim a standard deduction. You usually will pay less tax if you itemize.

If you would like any additional information please feel free to contact me.

Amare Berhie, Senior Tax Accountant

AB Tax Online

ABA Tax Accounting

amare@abataxaccounting.com

(651) 300-4777, (612)424-1540, (651) 621-5777