Whether to itemize deductions on your tax return depends on how much you spent on certain expenses last year. According to the IRS, money paid for medical care, mortgage interest, taxes, contributions, casualty losses, and miscellaneous deductions can reduce your taxes.
If the total amount spent on those categories is more than the standard deduction, you can usually benefit by itemizing.
For current year itemized returns, you have a choice of claiming a state and local tax deduction for either sales or income taxes. The IRS will provide optional tables for use in determining the deduction amount, relieving taxpayers of the need to save receipts throughout the year.
Sales taxes paid on motor vehicles and boats may be added to the table amount, but only up to the amount paid at the general sales tax rate. Check a box on Schedule A, Itemized Deductions, to indicate whether your deduction is for sales or income taxes.
The standard deduction amounts are based on your filing status and are subject to inflation adjustments each year. In 2018, they were:
- Single — $12,000
- Married Filing Jointly — $24,000
- Head of Household — $18,000
The standard deduction amount is more for taxpayers age 65 or older and for those who are blind. It is generally less for those who can be claimed as a dependent on some other taxpayer’s return. This is often complicated, so contact J Kelly & Associates and we can lead you in the right direction.