Most people claim the standard deduction when they file their federal tax return, but you may be able to lower your tax bill if you itemize. You can find out which way saves you the most by figuring your taxes both ways. The IRS offers these six tips to help you choose:
Figure Your Itemized Deductions. Add up deductible expenses you paid during the year. These may include expenses such as:
- Home mortgage interest
- State and local income taxes or sales taxes (but not both)
- Real estate and personal property taxes
- Gifts to charities
- Casualty or theft losses
- Unreimbursed medical expenses
- Unreimbursed employee business expenses
Special rules and limits apply to each type of itemized expense which may lead to less of a tax deduction than the actual expense.
Know Your Standard Deduction. If you don’t itemize, your basic standard deduction for 2015 depends on your filing status:
- Single $6,300
- Married Filing Jointly $12,600
If you’re 65 or older or blind, your standard deduction is higher than these amounts. If someone can claim you as a dependent, your deduction may be limited.
IRS YouTube Videos: Standard vs. Itemized Deductions – English
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