As many discovered with the last tax season, it was more beneficial to take the standard deduction and forgo itemized deductions. Then again, you may feel that your expenses exceed standard deduction amounts. Taxpayers will have to take a hard look at their expenses every year to see whether itemization or the standard deduction is the better choice.
Because the standard deduction is nearly doubled, many taxpayers will opt not to itemize deductions, which typically makes filing your taxes easier.
Finally, note a potential silver lining: You may be able to deduct more of your total itemized deductions if your itemized deductions were limited in the past due to the amount of your adjusted gross income. The old rule that limited the total itemized deductions for certain higher-income individuals has been suspended.
Tax deductions can be huge money-savers if you qualify for them. Otherwise, use the new higher standard deductions. Of course, new laws, regulations and interpretations can make subtle but important differences, so consult regulations and qualified professionals as you approach the next filing date.
Newsletter articles are posted every 2 weeks.
If you would like to have our e-newsletter delivered directly to your inbox, please sign up. Your information is confidential; you can unsubscribe at any time. Subscribe.