Should I Itemize Tax Deductions on My Taxes?

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When it comes to tax deductions on your tax return, you have two options. The first option is to take the standard tax deduction, which will be based on your tax filing status. For the 2016 tax year, the standard tax deduction starts at $6,300 for single filers and $12,600 for married filing jointly filers.

The second option is to itemize your tax deductions such as mortgage interest, property taxes, charitable tax donations, state and local income taxes, and medical expenses (if they exceed 10% of your adjusted gross income, 7.5% if 65 and older). These categories are the larger and more common of the expenses you might be able to deduct from your expenses.

TurboTax will ask you simple questions about your tax deductible expenses and figure out if you are eligible for the standard deduction or if you are eligible to itemize and cho0ses the option that maximizes your tax deductions based on your entries.

Can I Itemize?

Generally taxpayers who own a home and pay tax deductible home mortgage interest can itemize, but you may be able to itemize your tax deductions even if you don’t own a home and the following expenses are more than the standard deduction ($6,300 single, $12,600 married filing jointly). It’s worth taking the time to gather your receipts for the following expenses and letting TurboTax do the math, and see which option (standard deduction or itemized deductions) you are eligible for to maximize your tax deductions.

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 Certain Miscellaneous Deductions

7. Other Miscellaneous Deductions

What if they are close?

If your expenses are close to the maximum standard deduction amount you may want to make sure you are not missing any receipts for the above expenses, which may push you over the standard deduction and allow you to take more tax deductions.

Don’t worry about knowing these tax rules.  TurboTax will ask you simple questions about you and give you the tax deductions and credits you deserve based on your entries.

Comments (3) Leave your comment

  1. All true Jim. Well presented.

    If they are close, and in general with continue to run close, I have a bit of “fun with Schedule A” advice to share. Every other year (lets call them ‘odd years’) make a full years donations in January and again in December. No donations at all in even years. In the odd years make a 13th mortgage payment, even years, 11. Even property tax lends itself to grouping, in the odd years pay ahead a quarter or two. If you were close to the standard deduction, this method will help you go itemized every other year. Even $2000 itemized when in the 25% bracket will save you $500.

    This type of ‘what-if’ scenario is something TurboTax excels at. When you do your taxes this year you can see how close you came to itemizing, and tinker to see how you can use this strategy for filing your ’10 return.

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