It may seem like it takes a little more effort to itemize your deductions, but doing so can save you a tax time. By itemizing your deductions, you list all of your expenses and what you’ve paid on a Schedule A, which you file with your Form 1040. There are a range of expenses that qualify to be deducted through itemization.
Each year, the IRS offers the standard deduction amount, which is a pre calculated amount available to taxpayers who choose not to itemize. Once you’ve compiled your list of expenses, you should compare it to the current year standard deduction amount, and see which option gives you the best benefit. For 2015, the standard deduction (by filing status) is:
- Single- $6,300
- Head of household- $9,250
- Married filing jointly- $12,600
- Qualifying widow(er)- $12,600
- Married filing separately- $6,300
When you file your tax return, choose the option for your deductions, either itemizing or taking the standard deduction, which will save you the most money.
There are six different types of expenses they can be deducted using the itemized method:
- Medical and dental expenses
- State and local income taxes
- Interest charges
- Charitable donations
- Casualty and theft losses
- Miscellaneous deductions