Filing taxes comes with a slew of forms and phrases that are complex and confusing. Claiming standard deductions, or itemized deductions is a common question during tax filing season.
What is a Standard Deduction?
A standard deduction is a set amount provided by the IRS, that many taxpayers can deduct from their taxable incomes without itemized documentation. For many individuals, this is the common selection of deduction.
What is an Itemized Deduction?
Itemized deductions require more documentation, but do not have a set amount for deduction purposes. To claim itemized deductions, you must provide an item-by-item list, including amounts paid for state and local income or sales taxes. You can also include charity gifts, medical and dental expenses, and disaster losses.
Which One is Right for Me?
For most filers, a standard deduction is likely the best option. With less information required, this can help you obtain deductions without needing to provide granular details as to what your expenses include. For business owners, and individuals with higher deduction opportunities, claiming itemized deductions can increase your eligible deduction amount, and save you money on your tax return.
To ensure you claim the correct deductions, and do so correctly, hire a certified public accountant. Goldburd & Company is a respected, experienced, and professional option for those in the New York area.
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