Tax deductions: to itemize or not

Itemizing Tax Deductions in Rancho Cucamonga - Tax Free Person

We all have the same capabilities to itemize our taxes if we so choose. The issue is that, for many, let’s face it, taxes can be frightening. It is easy to think that itemizing deductions would be A, difficult, and B, a red flag. In reality, one in every four taxpayers would benefit by itemizing deductions, keeping more of their hard-earned money for their own needs.

We understand that the pressure and uncertainty that many people feel about paying taxes may keep them from exploring the potential for advantageous deductions, such as charitable donations, property taxes, and mortgage interest. At Whyte and Associates tax and accounting service, we help residents of Rancho Cucamonga and surrounding areas make sense of their taxes so that they may experience better financial wellbeing.

To itemize or not, the first step

In order to determine if the standard deduction is the best choice for you, the first step is to determine if your allowable expenses for the year exceed the standard deduction allowed in your filing status. For 2014 returns, deductions are:

  • $6,200 for single taxpayers, including married filing separate
  • $12,400 for married filing jointly
  • $9,100 for head of household

Individuals over the age of 65 and those who are blind have a different set of numbers for standard deductions based on filing status and other factors. If you fall into one of these categories, your tax expert at Whyte and Associates can provide you with assistance to ensure you retain as much of your personal money as possible.

Common deductions that can make a difference

  • Interest on your home mortgage or home equity loan can surpass your standard deduction very quickly. This deduction includes any points on your loan. The details of interest should be provided to you by your lender at the end of every year. Mortgage insurance premiums are no longer deductible, but property taxes are and they are just icing on the tax return cake.
  • State and local taxes, in many instances, can be deducted annually. The amount paid to your city or county and state will be found on the W-2 provided to you by your employer. In some cases, these expenses alone may exceed the standard deduction.
  • Charitable donations of money, clothing, furniture, and more can be deducted. It is necessary, however, to have a receipt that confirms their contribution.
  • Medical expenses may be deducted if the unreimbursed amount exceeds 10 percent of your adjusted gross income. Until 2016, individuals over the age of 65 and their spouses may deduct unreimbursed expenses that exceed 7.5 percent of the adjusted gross income.

Deducting individual, specific expenses does not have to be tricky. Your tax specialist in Rancho Cucamonga can take the stress out of itemized deductions at an affordable cost. Call Whyte and Associates at (909) 575-0080.