Traverse City MI 8-3-2019 - Every taxpayer is entitled to claim standard deductions on their taxes but they are left with a choice to make. Taxpayers can either take the standard deduction or itemize their tax return. They can't take both. So, what is the right choice? How does the standard deduction work and when can taxpayers claim it?
The standard deduction reduces the amount of taxable income and is very easy to claim. In recent times, the standard deductions for all filing statuses have doubled. And for the current tax year, the standard deduction is worth $12,000 for single taxpayers, $24,000 for married taxpayers filing jointly, and $18,000 if filing as the head of a household. The standard rate, however, gets smaller if someone else claims you as a dependent.
Taxpayers who take the standard deductions will not be able to take other tax deductions like the medical expenses, mortgage interest, and donations to charity. As a result, it is better to look into itemizing your returns to see if you can claim a larger deduction. If itemizing leads to a higher deduction amount then it should be the way to go. But if the difference is not significant, then going for the standard deduction will be a smarter move as it will save you a lot of time and effort. Also, you will be less likely to get audited.
American Tax Service recommends using the H&R Block online tax software to itemize deductions. By answering a couple of questions, the software will be able to identify what type of tax credits will give the biggest tax refund. So, whether you take the standard deductions or itemized deductions, you are sure you have made the right choice.
For more information about the standard deductions, please visit, https://americantaxservice.org/what-is-the-standard-deduction
About Frank Ellis
Frank Ellis is a Traverse City Tax Preparation Planner and published author. He has written tax and finance related articles for eight years and has published over 900 articles on leading financial websites.
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