Standard & Itemized Deductions

There are two deductions that you can take when filing your tax return. You can either take the standard deduction which is based on your filing status and set annually due to inflation, or itemize your deductions by reporting your expenses (located on Schedule A).

The standard option reduces your income before income tax. The itemized option reduces your taxable income in place of the standard deduction. This can result in a larger deduction based on the amount you are reporting. However, you can only itemize your deductions if it exceeds the standard deduction.

For example, the standard deduction for 2020 is:

• Single/Married filing separately: $12,400
• Married filing jointly rises: $24,800
• Head of household: $18,650

Here are some examples of itemized deductions that you can claim:

• Mortgage interest
• State and local income or sales taxes
• Property taxes
• Medical and dental expenses
• Gifts to charity (charitable donations)

This entry was posted on Monday, November 16th, 2020 at 3:41 pm and is filed under Deductions. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.