Everyone wants to know about itemized deductions. It sounds like something for the very rich and not us commoners, but itemizing can bring benefits if you meet the qualifications to claim enough deductions. Here is some general information about itemizing so that you can make the choice whether or not it is prudent for your tax return.
When talking about tax deductions, it’s important to know that there are actually two main kinds, standard and itemized. A standard deduction is a specific amount of money that decreases the income you can be taxed for. Obviously the smaller your income, the less taxes you will pay.
The amount of the standard deduction that applies to you personally is determined by your status. The standard deduction for a single person or a married person who files separately is around five thousand dollars. A couple who files together or someone whose mate has passed away and that has children can deduct a little over ten thousand dollars. If you are a family head, the standard deduction that applies in your case is about seven thousand five hundred dollars.
Itemized deductions offer the benefit of converting taxable income into non-taxable income. People who have spent enough money on items or services that qualify for deductions will find that itemizing is more profitable to them than simply claiming the standard deduction in their tax return. There are several categories of possible itemized deductions.
I have seen many interesting commercials over the past few weeks that talk about itemized deductions. One in particular features two guys working at a restaurant dressed in Bavarian outfits. One tells the other how he saved money on his taxes by claiming his lederhosen. It sounds absurd, but there is an itemized deduction for work-related expenses that are not reimbursed to the employee by their employer. You may not wear lederhosen, but uniforms and other materials are deductible when you itemize.
Another expense, and the most frequently itemized, would be those associated with health care. If you have long suffered from a debilitating illness or are caring for a family member who is, you are eligible for a wide array of deductions. Some of the expenses that can be itemized include medications, therapy, treatments, and any equipment needed. Although many feel that this money is simply lost, that doesn’t have to be the case.
To be eligible to itemize your deductions, there isn’t a specified amount of deductions that you need to meet. A large expenditure may be enough. Be sure to do your homework. Each kind of item that can be deducted is governed by different rules. If you spend enough money, though, you will be able to itemize the expense.
How can you decide whether or not to itemize your deductions? Do the math. Whichever option will get you the largest amount of money back will be what’s right for you.