ITEMIZED DEDUCTION OR STANDARD DEDUCTION?
Taxpayers will take the HIGHER of their allowed itemized deducitons (Form 1040, Schedule A) or their allowed standard deduciton each year they file an income tax return.
Itemized Deductions categories consist of:
1-Unreimbursed medical expenses in excess of 7.5% of of the taxpayers Adjusted Gross Income
2-Real Property Taxes on the taxpayers personal residence
3-Mortgage Interest on the taxpayers personal residence
4-Possibly Home Equity Interest on the taxpayers personal residence (if propery allocated to the residence)
5-Charitable Contributions (Cash and Non-Cash)
6-Gambling Losses to the extent of gambling winnings
NOTE: Because tax laws often change, the above list may not be all inclusive. These are the main categories of Schedule A. The allowed amounts are based on the current tax year in question.
The standard deductIon is based on the taxpayers filing status, year in question, and age.
It usually changes each year by the IRS.
The HIGHER of the two:
Once the total of the allowed itemized deductions is compared to the total allowed standard deduction, the taxpayer will take the higher of the two.
Changing Tax Laws:
NOTE: Because the tax rules usually change each year, you will always want to consider the rules for the year in question.
CALL NOW 561-746-1926 or 561-339-8102 if you have any questions or concerns or would like to schedule a FREE, Confidential, No-Obligation Tax-Saving Consultation.