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Is Itemizing Tax Deductions Only For the Wealthy?
by William Blake

Many people are curious as to the benefits of itemizing their tax deduction when they file. Although many feel that the option to do so really only applies to the wealthy, that is not the case. If you meet the criteria to do so, you may find doing so very beneficial. The following information should help you decide if it’s right for you or not.

There are two types of deductions: standard and itemized. The standard deduction is a fixed dollar amount that is used to reduce the amount of taxable income a person has. The less taxable income you have, the less the taxes will be that you are obligated to pay on it.

The amount of the standard deduction that applies to you personally is determined by your status. The standard deduction for a single person or a married person who files separately is around five thousand dollars. A couple who files together or someone whose mate has passed away and that has children can deduct a little over ten thousand dollars. If you are a family head, the standard deduction that applies in your case is about seven thousand five hundred dollars.

The benefits of itemizing your deductions are that you may be able to list some income that would ordinarily be taxed as non-taxable. If you have enough expenditures that fit into this category, you will definitely come out ahead by filing this way instead of just taking the standard deduction. What are some things that fit into that group?

One possible item that you can itemize as tax deductible would be any work oriented expenditure that you are not payed back for. For example, if you are required to buy your own clothing or a uniform where you work, you can itemize that expense on your tax return. Any other items that you are required to buy for your job and not compensated for also fits into this category and can be itemized. When you add up this expense at the end of the year, you may be surprised as to the amount of money you can claim as deductible.

The most common itemized deductions involve health care costs. Someone who has had a long, protracted illness or has cared for an ailing relative has a wealth of deductions that are available to them if they itemize. Money spent on prescription medications, therapy sessions, medical treatments, and equipment all qualify for a deduction. Costs that are not covered by insurance don’t have to be chalked up to a loss.

You don’t need a certain number of itemized deductions to be allowed to itemize. You could qualify in one category with the purchase of one or more large items. An important thing to remember is that each type of itemized deduction has its own set of guidelines. As long as the sum of money spent is large enough, it can be claimed.

Should you itemize? It is a matter of getting the greatest benefit for the best refund on your taxes. Let the numbers be your guide.

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Kalender
November 2008
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