When you’re filling out your tax return, you may choose to either take the standard deduction or itemize.
What does it mean to take the standard deduction?
The standard deduction is a certain dollar amount the IRS says you can deduct from your income that won’t be taxed. Your standard deduction will depend on your filing status, age, whether you have a disability, and if you can be claimed as a dependent. For example, in tax year 2020 (returns filed in 2021), the standard deduction is worth $12,400 for a single filer, and $24,800 for a married couple filing jointly. See a complete list of standard deduction amounts.
What does it mean to itemize?
Some people find that by claiming individual “itemized” deductions, they can lower their taxable income even more than the standard deduction would. Itemized deductions are certain expenses that the IRS allows you to claim on your return. Some of the most common itemized deductions include:
Who should itemize?
If you can write off more for your itemized deductions that you will get for taking the standard deduction, you should itemize when you file.
Almost everyone is eligible to take the standard deduction, but not everyone can take advantage of itemized deductions. For example, if you don’t have a mortgage, you won’t claim the mortgage loan interest deduction. If you don’t have out-of-pocket medical expenses, that deduction won’t apply to you either.
Here’s how to know whether itemizing or the standard deduction is right for you.
- Begin filing your return with TaxSlayer.
- Enter your information thoroughly to ensure the deduction finder picks up every possible break.
- The software will default to the method that gives you the biggest deduction*.
*You can always override the default method if you choose to.
TaxSlayer’s step-by-step deduction guide helps ensure accurate entry of your tax deductions. To see how we can cut your tax bill, sign up or finish your return today.
The information in this article is up to date through tax year 2020 (taxes filed 2021).