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Standard Deduction vs. Itemized:

In Accounting & Finances, Business, Taxes on April 11, 2012 by Sufen Wang Tagged: , , , , , , ,

Find Your Perfect Match

To itemize or not to itemize? That is the question with personal tax returns due April 17. When choosing between a standard or itemized deduction, you’ll want to pick the method that gives you the lower taxes.
 
To do this, first figure out the amount of your standard deduction. It’s based on your filing status and can change each year from inflation adjustments. For 2011, the amounts are:

Single: $5,800
Married Filing Jointly:   $11,600
Head of Household:   $8,500
Married Filing Separately:  $5,800
Qualifying Widow(er):  $11,600
 
These numbers are higher for taxpayers who are blind and/or 65 or older. If the total amount you spent on qualifying expenses is more than your standard deduction, you can usually benefit by itemizing.  
 
However, not everybody gets to choose between itemized and standard deduction. Are you a nonresident alien, dual-status alien, or an individual who files returns for periods of less than 12 months due to a change in accounting periods? If you answered yes to any of the above, you are not eligible for the standard deduction.
 

Those in the “Married Filing Separately” category have some extra rules when it comes to deductions. If one spouse itemizes deductions, the other spouse must also itemize to claim their allowable deductions. Better dust off those communication skills and make sure you and your spouse are on the same page, that is “standard or itemized?”  Hit that “refresh” button and make sure both of your tax returns are in sync….

Now that you’ve decided on standard or itemize, the next item on your list should be to finish your taxes…
 
On the Money,
Sufen Wang
Wang Solutions
 

One Response to “Standard Deduction vs. Itemized:”

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