How do I decide if I should claim standard deduction on my taxes or if I should claim itemized deductions?
When filing your taxes, there are two ways to claim deductions. You claim standard deduction or you may choose to claim itemized deductions. You are not allowed to claim both. Deductions reduce the amount of tax owed therefore you will want to determine which type of deduction benefits you most.
To decide which deduction to claim, first calculate your itemized deductions. You might be able to claim some itemized deductions on your state return even if you can’t claim them on your federal return. You will need Form 1040, Schedule A: Itemized Deductions to determine the amount of your itemized deduction.
If the amount of your itemized deduction is greater than your standard deduction then you will claim itemized deductions on your tax return.
The standard deduction is a dollar amount that reduces your taxable income. It is a benefit that eliminates the need to itemize your deductions. Your standard deduction is based on number of factors including your filing status. Most people claim standard deduction when the standard deduction is greater than the amount of the itemized deductions.