Scottsdale CPA | Deductions
While most taxpayers claim the standard deduction when they file their income tax returns, many taxpayers can lower the taxes substantially if they itemize their deductions. Figuring your itemized deductions can help to lower your tax bill. You should always calculate your itemized deductions and compare it against the standard deduction to see which is higher. Generally, the higher the deduction, the lower your tax bill will be. You should always file your tax return using the method that allows you to pay the least amount of tax.
To figure your itemize deductions, you would add up all of your deductible expenses. Deductible expenses may include: home mortgage interest, state and local income taxes paid, real estate property taxes, personal property taxes, gifts to charities, casualty or theft losses, unreimbursed medical expenses, unreimbursed employee business expenses, fees paid for income tax preparation, mortgage insurance premiums, investment advisory fees, certain legal or accounting fees and safe deposit box rental fees.
You would then compare the total of these deductions against the standard deduction for your filing status. The deduction amounts for each status are listed here:
Married filing Jointly – $12,400
Single – $ 6,200
Married filing Separately – $6,200
Head of Household – $9,100
Qualifying Widow(er) – $12,400
You would also want to verify that you are allowed to itemize. There are certain situations where the IRS does not allow a taxpayer to claim the standard deduction. One situation is a married filing separately couple where one spouse itemizes. If one spouse itemizes, both spouses must itemize.
To itmeize your deductions, a taxpayer would use form Schedule A to list all of the deductions and then transfer the total to the second page of the form 1040.
If you have any questions or would like more information, please contact us at Dusseau & Makris, PC, your Phoenix CPA firm.