Standard Deduction or Itemized Deduction?

 Standard or itemize deduction?

The standard deduction is a set dollar amount that can reduce your taxable income. It is adjusted each year for inflation and varies according to your filing status. You cannot take the standard deduction if you itemize deductions.

Your standard deduction consists of the basic standard deduction and any additional standard deduction for either age or blindness.  The additional amount for age will be allowed if you are age 65 or older at the end of the tax year. The additional amount for blindness will be allowed if you are blind on the last day of the tax year.

You should take the itemize deductions if your total deduction amounts are more than the standard deduction.  However, you are not allowed to take the standard deduction if

1. You are married and filing a separate tax return, and your spouse itemizes deductions,
2. You are filing a tax return for a short tax year because of a change in your annual accounting period, or
3. You are a nonresident* or dual-status alien during the year. You are considered a dual-status alien if you were both a nonresident and resident alien during the year.

*If you are a nonresident alien who is married to a U.S. citizen or resident at the end of the year, you can choose to be treated as a U.S. resident.  If you make this choice, you can take the standard deduction.

You may benefit from itemizing your deductions on Schedule A (Form 1040) if you:

1. Do not qualify for the standard deduction,
2. Had large amount of uninsured medical and dental expenses during the year,
3. Paid mortgage interest and property taxes on your home,
4. Had large amount of unreimbursed employee business expenses or other miscellaneous deductions,
5. Had large amount of uninsured casualty or theft losses,
6. Made large contributions to qualified charities,
7. Have total itemized deductions that are more than the standard deduction.

Deductions that you do not want to over look.

Below are some easily over look deductions that you may want to know when you itemize your deduction on your tax return.

	Fees for tax preparation services
	Fees for alcoholism and drug abuse treatment Appraisal fees for charitable donation or casualty losses Business related cell phone expense Fees for cleaning and laundering when traveling related to business Expenses for contact lenses, eyeglasses and hearing devices  Cost for contraceptives, if bought with a prescription Costs associated with looking for a new job in your present occupation Education expenses required by your employer to maintain or improve your job skills Fees for a safe-deposit box to hold investments (e.g., stock certificate) Fees paid for childbirth preparation classes if instruction relates to obstetrical care Gambling losses to the extent of gambling winnings Investment advisory fees Long-term care insurance premiums  Medical transportation, including standard mileage deduction and lodging expenses incurred for medical reasons while away from home  Expenses related to charitable activities, including the standard mileage deduction  Health insurance premiums if you are self-employed  Penalty on early withdrawal of savings  Protective clothing required at work  Special equipment for the disabled  Subscriptions to professional journals  Trade or business tools with life of one year or more
	If you have any questions, please feel free to email us. Your comments and feedbacks are welcome. Source:  www.irs.gov. Email:   Excellent-tax@gmx.com