top of page
Search
  • Writer's pictureLorena Anoceto

Should you Itemize your taxes?

“Should I itemize or take the standard deduction” is a question just about every taxpayer asks. Your tax professional can help you decide which path is best for your situation. But as you get ready for your tax prep meeting, here are answers to three vital questions concerning this common but complicated tax question.

What is the definition of Standard and Itemized Deductions?

The Standard Deduction: This is a dollar amount determined by the IRS that you may subtract from your taxable income to reduce the amount of taxes owed. You do not have to show any proof of expenses for this deduction. The amount you can take as a standard deduction varies depending on your age and filing status, and it can change each year.

The Itemized Deduction: Taxpayers may also itemize deductions, meaning you keep track of expenses throughout the year that the IRS allows as deductions. You then subtract the total allowable amount of deductions from your taxable income to determine the amount you’ll be taxed on.

You can choose either the standard deduction or itemized deductions, but you may not do both. Your tax professional can help you decide which option is best for you. However, if you are a married taxpayer filing separately from your spouse, you must both choose the same method of deduction.

Which deduction approach is better?

Your tax professional is the best resource for this question. In general, you’ll want to choose the deduction method that results in the lowest Adjusted Gross Income (AGI), because that will allow you to pay the least amount of taxes. With the standard deduction, you’ll have less math and no need to document your deductions, but the total is limited to whatever amount the government allows. With itemized deductions, you’ll have more math and you’ll need to provide proof of the expenses you’re deducting, but you may be allowed to deduct more and therefore pay less in taxes.

What Can I Itemize?

Again, your tax professional is the best person to help answer this question, but here is a list of potential deductions from the IRS. Keep in mind that the allowable deductions and rules for applying them can change from year to year, so it’s best to get advice from a tax expert on what qualifies for your particular situation.

Taxes are certainly a complicated topic with lots of details and nuance involved, but don’t feel overwhelmed. We’re happy to make a recommendation to a tax professional or help you streamline your personal tax process, just give us a call!

PLEASE NOTE: When you link to any of the websites displayed within this email, you are leaving this email and assume total responsibility and risk for your use of the website you are linking to. We make no representation as to the completeness or accuracy of any information provided at these websites.

Stephanie Harveystephanie@canebayfp.com315-657-6449Cane Bay Financial Planning, LLC

Securities and investment advisory services offered through Woodbury Financial Services, Inc. (WFS), member FINRA/SIPC. WFS is separately owned and other entities and/or marketing names, products or services referenced here are independent of WFS. PLEASE NOTE: When you link to any of the websites displayed within this website, you are leaving this website and assume total responsibility and risk for your use of the website you are linking to. We make no representation as to the completeness or accuracy of any information provided at these websites.

This communication is strictly intended for individuals residing in the states of NY and NH. No offers may be made or accepted from any resident outside the specific state(s) referenced.

This message and any attachments hereto contain information that is confidential and intended for use only by the addressee. If you are not the intended recipient, or the employee or agent of the intended recipient responsible for delivering the message, you are notified that any review, copying, distribution or use of this transmission is strictly prohibited. If you have received this transmission in error, please (i) notify the sender immediately by email or by telephone and (ii) destroy all copies of this message.

This information is not intended to be a substitute for specific individualized tax, legal or investment planning advice.

This informational email is an advertisement and you may opt out of receiving future emails. To opt out, please click the "Unsubscribe" link below.This message was sent by

Cane Bay Financial Planning, LLC

315-657-6449

116 Lucky Day Drive

Summerville, SC 29486

3 views0 comments

Recent Posts

See All

What Are Income Taxes For?

https://www.ramseysolutions.com/taxes/what-are-income-taxes Taxes . . . can’t live with ’em, can’t live (in America) without ’em. Whether we like it or not, income taxes are as much a part of American

Comentarios


bottom of page