There was a time when most people had to choose between taking a standard deduction and itemizing their deduction. While you still have to pick one or the other, there simply aren’t as many people choosing itemized deductions.
The reason for this is the introduction of the TCJA (Tax Cuts and Jobs Act). If you’re unsure which option is right for you, read on and learn more about itemized and standard deductions.
If after you’ve finished exploring this article you need assistance with your tax needs, contact the Law Office of Mary King.
With years of experience in dealing with all matters of tax law, you can trust that you’re getting expert legal counsel for all tax concerns.
Tax return preparation lawyer Mary King deals with the IRS on a regular basis and is equipped to assist you with all of your tax-related needs.
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Itemized Deductions: What Does This Mean?
Before we can fully understand itemized deductions, we need to look at standard deductions. The latter is a specific amount of money that you can have deducted every year.
This monetary amount accounts for expenses that you would typically deduct for personal reasons, such as property taxes, medical expenses, or mortgage payments.
Rather than deduct each personal expense, a standard expense gets deducted. This amount is subject to inflation to ensure equal deductions with each passing year.
Since the TCJA essentially doubled standard deductions in 2018, it has become the most widely chosen option for tax deductions.
For those who prefer to do their taxes the old-fashioned way, itemized deductions let you deduct individual expenses, line by line. Obviously, this method requires much more time and work to complete.
What’s more, you need to understand which of your personal expenses are deductible in the first place and list them accordingly. In order to effectively do this, you have to keep track of all your expenses throughout the tax year.
Every purchase and bill must be saved to ensure accurate reporting. It’s important to note, however, that itemized deductions are typically personal expenses, such as:
1. Income and sales taxes (both state and federal)
2. Mortgage payments
3. Casualty losses
4. Property taxes
5. Medical bills
It’s also worth noting that the IRS became stricter on what they permit to be deducted. Still, state income taxes, property taxes, and mortgage payments remain some of the greatest deductions.
As such, it is more likely that homeowners will choose itemized deductions, whereas renters tend to opt for standard deductions.
Is Itemizing Your Deductions Right for You?
It’s interesting to point out that many tax experts are estimating that only around 11% of American taxpayers will use itemized deductions. This figure is quite the reduction from years past.
Compared to tax years before 2018, the number of taxpayers using itemized deductions today is down by about 21%.
If you do plan to itemize your taxes, you will need to fall under the following categories, as per the new TCJA guidelines:
1. You are uninsured and paid substantial medical/dental expenses out of pocket
2. Suffered a declared federal disaster with uninsured casualty losses
3. A homeowner who paid a lot of taxes and interest on your property
4. You contributed significant assets to charities
Moreover, you’re not going to get any advice from the IRS as to which deduction type is in your best interest. You can easily choose the incorrect option and pay more than necessary on your taxes.
Therefore, you have to decide which route to take. And in order to do this successfully, you should speak with an experienced tax return preparation lawyer.
When you hire the Law Offices of Mary E. King, you can trust that you will be advised on which deduction brings you the best return.
Secure the Services of the Law Offices of Mary E. King
Please don’t hesitate to contact tax return preparation lawyer Mary E. King for assistance with your tax needs. Taxes are often tricky and time-consuming matters and Mary King is just the expert you need to assist you with your deductions and other tax issues.
If you require guidance from an experienced tax specialist, please contact the Law Offices of Mary E. King. They have spent years assisting Florida residents and business owners on tax matters and can offer the attention and expertise you need to overcome your tax issues.
The information in this blog post is provided for informational purposes only and is not intended to be legal advice. You should not make a decision whether or not to contact an attorney based upon the information in this blog post. No attorney-client relationship is formed nor should any such relationship be implied. If you require legal advice, please consult with an attorney licensed to practice in your jurisdiction.