When it comes to filing taxes, one of the key decisions taxpayers face is whether to take the standard deduction or to itemize their deductions. This decision can have a significant impact on the amount of taxes owed or refunded. Understanding the factors that influence this choice is essential for making informed decisions about tax filings.
For most taxpayers, opting for the standard deduction is the more advantageous choice. The current standard deduction stands at $13,850 for single filers and $27,700 for married couples. According to tax professionals, itemizing deductions is typically only beneficial if the total itemized deductions exceed the standard deduction.
Kathy Pickering, chief tax officer at H&R Block, advises that taxpayers whose total itemized deductions are lower than the standard deduction for their filing status would benefit from taking the standard deduction. On the other hand, if a taxpayer’s total itemized deductions surpass the standard deduction applicable to them, itemizing becomes the more favorable option.
It is crucial for taxpayers to assess their individual financial circumstances and evaluate whether their itemized deductions exceed the standard deduction. This evaluation can have a significant impact on the overall tax liability and potential refunds. By understanding the implications of standard deduction versus itemized deductions, taxpayers can make informed decisions when filing their taxes.
