Should You Itemize Your Deductions?

To itemize or not to itemize, that is the question. Let’s see what the Tax Man has to say:

    Whether to itemize deductions on your tax return depends on how much you spent on certain expenses last year. Money paid for medical care, mortgage interest, taxes, charitable contributions, casualty losses, and miscellaneous deductions can reduce your taxes. If the total amount spent on those categories is more than the standard deduction, you can usually benefit by itemizing.
    The standard deduction amounts are based on your filing status and are subject to inflation adjustments each year. For 2006, they are:

    Single $5,150

    Married Filing Jointly $10,300

    Head of Household $7,550

    Married Filing Separately $5,150

There are a few exceptions, conditions, etc that the Tax Man explains in his post, so check it out. Also, keep in mind that itemizing is fun. Yes, really. —MEGHANN MARCO

SHOULD YOU ITEMIZE YOUR DEDUCTIONS? [Tax Man]

Comments

Edit Your Comment

  1. kenposan says:

    I itemize every year using Turbo Tax. It will tell you if your itemizing is worth it and show you the difference. I have ended up taking the standard deductions the last two years.

  2. The $10,300 standard deduction for married filing jointly really makes the decision a little trickier for those with mortgage interest. A lot of people say they want a home and claim the mortgage interest deductibility as one of the great benefits, but when the standard deduction is already so high (and you don’t spend any money to get it), it really does make the decision less clear cut.

  3. dohtem says:

    Ohh… another kitty.

    I’M IN UR HOUSE
    STEELIN’ UR IDENTITIEZ!

  4. sam says:

    State taxes are really what will make it worth it or not to itemize – if you live in a state like New York, where state income taxes are relatively high, it almost always makes sense to at least do the itemization calculation.

  5. etinterrapax says:

    We always itemize because my husband travels so much for work and has to use his own car. Mileage put us over the top before we had a mortgage.

  6. thrillhouse says:

    The vast majority of Americans do not itemize. Think about that the next time people try to use tax shelters to justify financial stupidity. Otherwise you’ll do things like paying $7000 to the bank to avoid paying $1750 to the IRS…

    Also, home office deductions are a red flag to the IRS accoring to old Norm Rollins

  7. drsmith says:

    What’s with the fascination with kitties?

    (and, yes, I did think of at least a couple of funnier ways to ask that question)