Tax deduction wisdom – Should you itemize?


Compare and perhaps saveStandard deduction for single taxpayers—$12,000Standard deduction for married taxpayers filing a joint return—$24,000Standard deduction for head of household taxpayers—$18,000Single or Head of Household:65 or older$1,550Blind$1,550Both 65 or older and blind$3,100Married, Widow or Widower:One spouse 65 or older, or blind$1,250One spouse 65 or older, and blind$2,500One spouse 65 or older, and both blind$3,750Both spouses 65 or older$2,500Both spouses 65 or older, and one blind$3,750Both spouses 65 or older, and both blind$5,000If you own a homeMany lenders provide a year-end tax summary that includes any real estate taxes and insurance paid through escrow accounts. The real estate taxes are deductible, but homeowner’s insurance and homeowner’s association fees are not.If your real estate taxes aren’t paid through an escrow account, review your property tax bills and cancelled checks and add up what you paid. You can’t deduct any penalties you paid for late payment of property taxes; you can only deduct the actual taxes assessed and paid.State and local taxesCharitable donationsUnder the old rules, taxpayers needed a receipt to back up any charitable contribution of $250 or more (a cancelled check was not sufficient).That’s still the case for contributions of $250 or more. But now you also need a receipt or a cancelled check to back up deductions for smaller donations as well.Medical expense deductionsMiscellaneous tax deductions (for tax years prior to 2018)Review the miscellaneous deductions listed below.Add up the ones you can take.Calculate 2% of your Adjusted Gross Income.Compare the two figures.Dues you pay to a union or a professional organization in connection with your employmentSubscriptions to magazines and other publications that are related to your workBusiness liability insurance premiumsThe cost of protective work clothing, such as hard hats or safety shoes and glasses, and the cost of uniforms you’re required to wear to workTools and supplies used in your workMedical examinations required by an employerTuition for classes that maintain or improve the skills required for your present jobExpenses you incur while looking for a job in the same line of work you normally do (for example, résumé costs, career counseling and employment agency fees)Depreciation on your computer or cellular phone, but only for the part of the time you use your equipment to keep track of your taxable investments (stocks, bonds, mutual funds) or as part of your job, if required by your employerThe fees your financial institution charges to maintain your IRA account, but only if you …read more


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