Itemized Deductions or the Standard Deduction?
Choosing the right tax deductions is a key element of preparing your federal tax return. When you prepare your tax return, you will be able to choose between itemizing deductions or taking the standard deduction.
Itemizing deductions means listing them on a Schedule A. Some tax deductions (and all tax credits) may be claimed regardless of whether you itemize deductions or not. Many deductions, however, must be itemized.
Should I Itemize Deductions or Take the Standard Deduction?
If the total amount of your itemized deductions is not greater than the standard deduction amount for your filing status, then you should take the standard deduction instead of itemizing.
When you prepare your federal tax return on efile.com, you will be able to enter itemized deduction information by selecting Schedule A and we will calculate whether the standard deduction would be worth more to you than itemizing deductions. You can then choose to automatically select the most valuable deduction option for you, or you can force it to pick one or the other.
When Should I Itemize Deductions?
You should itemize if the total amount of your itemized deductions is more than your standard deduction amount.
What Are Itemized Deductions?
Itemized deductions are certain expenses that you can use to lower your taxes. These include:
- Medical and dental expenses
- State and local income taxes, or state and local sales taxes
- Real estate and personal property taxes
- Home mortgage and investment interest
- Mortgage insurance premium payments
- Charitable contributions
- Casualty and theft losses
- Job-related expenses
- Miscellaneous deductions
Itemized Deduction Limits
For Tax Year 2017, the itemized deduction phaseout amount, or limitation, for individuals begins with incomes of $261,500 or more ($313,800 for married couples filing jointly).
For Tax Year 2016, the itemized deduction phaseout amount, or limitation, for individuals begins with incomes of $259,400 or more ($311,300 for married couples filing jointly).
What is the Standard Deduction?
The standard deduction is a dollar amount that reduces the amount of your taxable income. You cannot claim the standard deduction if you claim itemized deductions.
The standard deduction amounts for any given tax year are based on filing status. See the current standard deduction dollar amounts.
Standard Deduction Limits
When a married couple files separately and one spouse itemizes deductions, the other spouse may not claim the standard deduction.
There are rare cases when a taxpayer may not claim the standard deduction: nonresident aliens, dual–status aliens, and individuals who file returns for periods of less than 12 months do not qualify for the standard deduction, but they may itemize.
If you are claimed as a dependent on someone else's tax return, your standard deduction amount may be limited.
Learn more about the standard deduction.
What Are the Standard Deduction Additional Amounts?
In some cases, the basic standard deduction for your filing status can be increased by certain additional amounts. If you or your spouse are age 65 or older, blind, or claiming a disaster loss, you may qualify for an additional standard deduction amount. If you file a separate return and can claim an exemption for your spouse, you will be allowed any additional amounts that apply to your spouse.
Additional Deduction for Age
The additional standard deduction amount for age will be allowed if you are age 65 or older on December 31 of the tax year. For tax purposes, you are generally considered to be 65 on the day before your 65th birthday. This means that you are 65 or older on December 31 of the tax year or January 1 of the following year.
Additional Deduction for Blindness
The additional standard deduction amount for blindness will be allowed if you are legally blind on the last day of the tax year. Therefore, a single taxpayer who is age 65 and legally blind would be entitled to a basic standard deduction and two additional deductions.
Additional Deduction for Disaster Loss
Anyone who suffered a disaster-related casualty loss in a presidential-declared disaster area may add that amount to their standard deduction. Learn more about the additional standard deduction amount for disaster loss.