Standard Deduction vs Itemizing Explained
By Tax&Facts | Published on | Read: 3 Mins
Overview
Choosing between the standard deduction and itemizing can significantly affect how much tax you pay. The standard deduction is a fixed amount you can subtract from your income with no documentation required. Itemizing allows you to deduct specific expenses such as mortgage interest, state and local taxes, medical expenses, and charitable donations.
The general rule is simple: choose the option that gives you the larger deduction. Our tool will automatically compare both options for you. Just enter your details and we will show you the best tax-saving choice.
FAQs
1. What is the standard deduction?
The standard deduction is a flat amount the IRS allows you to subtract from your income.
It requires no receipts or recordkeeping and is the most common option for taxpayers.
2. What expenses qualify for itemizing?
Itemized deductions may include mortgage interest, charitable donations, certain medical
expenses,
and state or local taxes up to IRS limits.
3. Who usually benefits from itemizing?
Homeowners, taxpayers with high state or local taxes, individuals with large medical
expenses,
and those who donate significant amounts to charity often benefit from itemizing.
4. How can I tell which method saves me more?
Compare your standard deduction with your total itemized deductions. The larger amount
usually
results in lower taxable income. Our tool does this for you automatically.
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