Itemize Deductions Or Standard Deduction

Taking the standard deduction or itemizing on your tax return is a confusing thing for most people. Have no fear, we are here to make it easy for you! The general rule of thumb is, if the standard deduction amount for your filing status is greater than your total itemized deductions, then you should take the standard deduction. Otherwise, you should claim itemized deductions on your tax return.

So how to decide which is better for you? 

When you prepare your return on eFile.com, we will calculate which is better for you and which gives you the most tax advantages, the Standard Deduction OR Itemized Deductions. We look out for you and you and show you the results and all you do is pick the one you prefer. It's as simple as that.

With the recent tax reform and the increased standard deduction amounts for your 2018 return, it might be best to take the standard deduction for a lot of folks. You can see the new standard deduction dollar amounts. If you want more information about whether to claim the standard deduction or itemized deductions, read on or start your return on eFile.com and see the actual results based on your personal tax situation. 

Standard Deduction

The standard deduction is a dollar amount that reduces the amount of your taxable income. The standard deduction amounts for any given Tax Year are based on filing status. See the current standard deduction dollar amounts.

You cannot claim the standard deduction if any of the following situations apply to you: 

  • You claim itemized deductions.
  • If you are married and file as Married Filing Separately, and your spouse itemizes.
  • You are a nonresident alien, dual–status alien, or an individual who files tax returns returns for periods of less than 12 months. 

Your standard deduction may be limited if you are claimed as a dependent on someone else's tax return, for example if you are claimed as a dependent on your parents' tax return.

Standard Deduction Additional Amounts

There are additional standard deduction amounts based on the following factors:

  • Age: You can claim the additional standard deduction amount for age if you are age 65 or older on the last day of a Tax Year. Except if your birthday is January 1. For tax purposes, you are 65 or older on December 31 of the tax year or January 1 of the following year.
  • Blindness: You can claim the additional standard deduction amount for blindness if you are legally blind on the last day of a Tax Year. Therefore, if you are age 65 and legally blind, you would be entitled to a basic standard deduction and two additional deductions.
  • Disaster loss: If you had a disaster-related casualty loss in a presidential-declared disaster area, you may add an additional amount to your standard deduction.

If you are still not sure which tax deduction to use on your tax return, we at eFile.com can make this easier for you. When you prepare your tax return on eFile.com, based on the information you provide, we will calculate your standard deduction amount.

Itemized Deductions

Itemized deductions are types of expenses that you have during the year that the IRS considers to be tax deductible. These include:

You should itemize if the total amount of your itemized deductions is more than your standard deduction amount.

Itemized Deduction Limits

For 2018, there is no longer a limitation on itemized deductions based on your adjusted gross income. However there are other limitations that may affect the impact of your Schedule A, such as State And Local Taxes (SALT), which is limited to $10,000.

Reporting Itemized Deductions on Your Tax Return

When you prepare your return on eFile.com, if itemizing deductions is more beneficial for you, we will automatically generate the Schedule A which is used to report itemized deductions on your return.

Check out more tax deductions you may qualify to claim on your tax return.