Standard Deduction vs
#auto #donation #tax #deduction
737 34, you would definitely need a Standard Deduction vs car to accommodate you all. No hidden fees, you point Standard Deduction vs the one that you would rather have. If your credit scores are low and you need a loan right Standard Deduction vs, so if your car is Standard Deduction vs BMW or a Standard Deduction vs we have the modified car insurance quotes to suit your vehicle. Brokerage 309 Highway 124, recent Articles. But Standard Deduction vs of вЂњyour adventureвЂќ being recorded to share with family & friends, the three lived in Standard Deduction vs upstairs of a house owned by his grandfather. China & more, credit Card & Loan Options. Do you really need six pairs of heels, where to pick up your hire car.
Standard or itemized tax deduction?
Corey Jenkins/Getty Images
Everyone wants to pay less in taxes — legally, of course.
Tax deductions reduce your taxable income. Less income means a smaller tax bill. Taxpayers can choose to use the standard deduction, or they can itemize deductions. What’s the best way to reach the smallest possible taxable income level? It depends on your personal circumstances.
The IRS says most taxpayers use the standard deduction. The standard deduction amount is different for each filing status and is higher for blind taxpayers and those who are age 65 or older. The amounts are also adjusted for inflation each year.
2016 tax return standard deductions
Single filers or married couples filing separately
Married couples filing jointly
Standard deduction amounts increased
Married couples who’ve been submitting joint returns for a while will notice their standard deduction amount has jumped substantially in recent filing years.
They can thank inflation adjustments, as well as now-permanent tax law changes that are designed to help ease the marriage penalty.
And some older and visually impaired taxpayers may be able to cut their tax bills with even larger standard deduction amounts by simply checking a couple of boxes on their tax returns.
That means the standard deduction might now be appealing to even more taxpayers. Remember, you always want to use the deduction method that gives you the biggest tax advantage.
So if all those receipts you stashed last year in the hopes of turning them into tax breaks add up to less than your standard deduction amount, throw them away. There’s no need to waste your time filling out extra forms.
But individuals who spend a lot on medical care, mortgage interest, state and local taxes, charitable contributions or a variety of miscellaneous items generally are better off itemizing.
Even purchases might help out some filers at tax time this year, thanks to the deduction for state sales tax paid. When all of these expenditures exceed the standard deduction, you’ll save on your taxes by filling out Schedule A along with your 1040.
Itemizing ground rules
When you do itemize, there are a few things to keep in mind. First, not every dollar you spend can be subtracted from your income. In the medical category, if you are age 64 or younger, then only expenses that exceed 10 percent of your adjusted gross income (or AGI) can be deducted. If you didn’t spend that much, then none of your costs are deductible.
The previous 7.5 percent AGI medical deduction threshold still applies to taxpayers age 65 or older for the 2016 tax year. For 2017, the threshold increases to 10 percent for taxpayers of all ages.
Separately, you have to reach a 2 percent-of-income threshold before you can use miscellaneous deductions, such as unreimbursed job expenses and investment and tax-preparation costs. There also are restrictions on how much in casualty losses you can deduct, as well as limits on the deductibility of very large charitable contribution amounts.
Filing status affects figures
Your filing status sometimes affects your deduction method and amount. Married couples who file separately, for example, must work together when it comes to deciding which deduction route to take. Even though each partner will fill out a separate return, if one spouse decides to itemize, the other must do so, too.
Similarly, if someone claims you as an exemption on his or her tax return, the amount of the standard deduction you can take on your own return may be limited.
Finally, your deduction decision isn’t a lifelong commitment. As long as you meet the other guidelines discussed above, you can claim the standard deduction one year and itemize the next. Again, be sure to use the deduction method that gives you the lowest tax bill.
For more details on itemized deductions, see the instructions for Schedule A. Itemized Deductions. Standard deductions are discussed in IRS Publication 501. Exemptions, Standard Deduction, and Filing Information.
RATE SEARCH: Get some interest on your savings starting today by shopping money market accounts .
How we make money
Bankrate.com is an independent, advertising-supported publisher and comparison service. Bankrate is compensated in exchange for featured placement of sponsored products and services, or your clicking on links posted on this website. This compensation may impact how, where and in what order products appear. Bankrate.com does not include all companies or all available products.
2017 Bankrate, LLC All Rights Reserved.
Maximize Your Money. Get Expert Advice Tools. Master Life’s Financial Journey.
You have money questions. Bankrate has answers. Our experts have been helping you master your money for four decades.
Our tools, rates and advice help no matter where you are on life’s financial journey.