According to the Business section of US News dated December 9, 2019, “While you don’t have much choice when it comes to paying taxes, you can benefit from significant deductions that reduce the amount you owe Uncle Sam.”
Standard Deduction
To compensate for the loss of personal exemptions, the standard deduction was nearly doubled for the 2018 tax year, and it was again adjusted upward for 2019. Depending on your tax-filing status, you are entitled to take one of the following standard deductions:
— Single or married filing separately: $12,200.
— Head of household: $18,350.
— Married filing jointly or qualified widow(er): $24,400.
Though the standard deduction is a simple method, it might not be the best option based on your financial situation.
Itemized Deductions
Unlike the standard deduction, itemized deductions can result in a different amount for each taxpayer. Itemized deductions are claimed on a Schedule A form and are broken down into five main categories:
— Medical and dental expenses.
— Taxes you paid.
— Interest you paid.
— Gifts to charity.
— Casualty and theft losses.
There is also a line for other itemized deductions, which covers less common situations such as gambling losses and certain unrecovered investments in a pension. However, for most people, state and local taxes, mortgage interest and charitable donations will make up the bulk of their itemized deductions.
Anyone with deductible expenses that exceed the standard deduction should itemize.
To read the rest of the article, go to https://www.yahoo.com/finance/news/pros-cons-standard-vs-itemized-142114586.html
