Tax season is here, and with that comes a new year of choosing between itemized and standard deductions with the IRS.
Almost 90% of Americans that use these deductions choose the same one.
There are difference that can help you decide.
Differences between the standard and itemized deduction with the IRS
A standard deduction is a flat amount decided on by the IRS.
This amount depends on what your filing status is.
You can claim it on Form 1040.
An itemized deduction is how much you’ve spent on expenses.
Itemized deductions can include
- medical expenses
- state and local taxes
- mortgage interest
- charitable contributions
If you choose this deduction you need to list your expenses on Schedule A to submit with your tax return.
Which deduction do most Americans claim with the IRS?
With this choice you aren’t keeping track of everything you’ve spent money on in a year.
If you choose itemized then you need to keep receipts for medical bills, tax forms, and your bank statements.
If you find that the standard deduction is worth less than what you spend, then itemized might be better for you.
What are the standard deduction amounts for 2022?
- Single: $12,550
- Head of household: $18,800
- Married: $25,100
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