It\u2019s important for taxpayers to know the difference between standard and itemized deductions
\nTaxpayers have two options when completing a tax return, take the standard deduction or itemize their deductions. Most taxpayers use the option that gives them the lowest overall tax.
\nDue to all the tax law changes in the recent years, including increases to the standard deduction, people who itemized in the past might want to switch to the standard deduction.
\nHere are some details about the two options.
\nStandard deduction
\nThe standard deduction amount increases slightly every year and varies by filing status. The standard deduction amount depends on the taxpayer’s filing status, whether they are 65 or older or blind, and whether another taxpayer can claim them as a dependent. Taxpayers who are age 65 or older on the last day of the year and don’t itemize deductions are entitled to a higher standard deduction.
\nMost filers who use Form 1040 can find their standard deduction on the first page of the form. The standard deduction for most filers of Form 1040-SR, U.S. Tax Return for Seniors, is on page 4 of that form.
\nNot all taxpayers can take a standard deduction, which is discussed in the Instructions for Forms 1040 and 1040-SR. Those taxpayers include:
\n\u2022\tA married individual filing as married filing separately whose spouse itemizes deductions\u2014if one spouse itemizes on a separate return, both must itemize.
\n\u2022\tAn individual who files a tax return for a period of less than 12 months. This is uncommon and could be due to a change in their annual accounting period.
\n\u2022\tAn individual who was a nonresident alien or a dual-status alien during the year. However, nonresident aliens who are married to a U.S. citizen or resident alien can take the standard deduction in certain situations.
\nItemized deductions
\nTaxpayers choose to itemize deductions by filing Schedule A, Form 1040, Itemized Deductions. Itemized deductions that taxpayers may claim include:
\n\u2022\tState and local income or sales taxes
\n\u2022\tReal estate and personal property taxes
\n\u2022\tHome mortgage interest
\n\u2022\tMortgage insurance premiums on a home mortgage
\n\u2022\tPersonal casualty and theft losses from a federally declared disaster
\n\u2022\tGifts to a qualified charity
\n\u2022\tUnreimbursed medical and dental expenses that exceed 7.5% of adjusted gross income
\nSome itemized deductions, such as the deduction for taxes, may be limited. Taxpayers should review the instructions for Schedule A Form 1040 for more information on limitations.<\/p>\n","protected":false},"excerpt":{"rendered":"
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