Everyone is entitled to reduce their taxable income by tax deductions. Generally speaking, you can choose between your standard deduction and your itemized deductions. Just be sure to choose whichever is advantageous. Either the standard deduction or itemized deduction will reduce your adjusted gross income to arrive at your taxable income. It’s on the taxable income amount that you tax will be calculated.
Whether to itemize deductions on your tax return depends on how much you spent on certain expenses the prior year. Money paid for medical care, mortgage interest, taxes, charitable contributions, and casualty losses can reduce your taxes. If the total amount spent on those categories is greater than your standard deduction, you will benefit by itemizing.
Standard deduction amounts are based on your filing status and are subject to inflation adjustments each year. For 2018, they are:
Married Filing Jointly $24,000
Head of Household $18,000
Married Filing Separately $12,000
Qualifying Widow(er) $24,000
Some taxpayers have different standard deductions The standard deduction amount depends on your filing status, and whether an exemption can be claimed for you by another taxpayer.
Married Filing Separately When a married couple files separate returns and one spouse itemizes deductions, the other spouse cannot claim the standard deduction and therefore must itemize to claim their allowable deductions.
Some taxpayers are not eligible for the standard deduction They include nonresident aliens, dual-status aliens and individuals who file returns for periods of less than 12 months due to a change in accounting periods.
Still not sure what works best for you and your situation stop in to Pinnacle Tax Service Inc. and we will be happy to discuss what works best for you.