When it comes to taxes, everyone wants to get the maximum return possible. No one wants to give the IRS more than they are owed. If you aren’t filing right, you might be leaving money on the table that is rightfully yours. When you file your taxes, there are two ways to claim a deduction, standard and itemized. It is important that you understand the difference between the two so that you can decide which one fits your circumstances the best. Mark Dicus & Company is here to talk about the difference between standard deduction and itemized deduction.
Standard Deduction
More people take the standard deduction rather than the itemized deduction. This is because with the standard deduction, there is a fixed dollar amount that will help decrease the income that you are able to be taxed on. When you choose the standard deduction, it allows you to claim a deduction without the hassle of keeping details records of every little thing that you’re hoping to itemize and deduct from your taxes. Here are the deduction amounts for 2023:
– Single or married filing separately: $13,850
– Married filing jointly or qualifying widow: $27,700
– Head of household: $20,800
Itemized Deduction
The itemized deduction looks quite different than the standard deduction. Rather than being a fixed amount that brings down your adjusted gross income, you add up all the applicable deductions you have and then subtract that number from your adjusted gross income. This is different for everyone, but it can be extremely beneficial if you have enough deductions to make it worth filing this way. Some of the most common deductions are:
– Mortgage interest
– Casualty & theft losses due to a natural disaster
– Charitable donations
– Deduction for local & state taxes
– Unreimbursed Medical & dental expenses
– Gambling losses for those that report winnings on taxes
How to Choose the Right Deduction
The best way to choose the right deduction is to compare the two. You will obviously want to choose the one that is going to give you the largest return or the one that lowers your tax bill the most. Even when you decide that you want do o the standard deduction, you might find that you can claim some itemized deductions on your state return even if you find that you can’t claim them on your federal return. One of the best ways to determine the best way to file your taxes is to have a certified accountant help you prepare your taxes.
Bookkeepers, Accountants & More in Summerlin, North LV, Henderson, Lone Mountain Village & Greater Las Vegas, Nevada
At Mark Dicus & Company, it is our goal to help lower your tax bill and increase your tax return. We can help you prepare your taxes to ensure that you’re taking advantage of any credits and deductions that are available to you. The last thing you want to do is donate money to the IRS. Call us today!