Today, Optima Tax Relief’s Lead Tax Attorney, Phil Hwang, discusses all things tax deductions.
Everyone wants a big refund. So, how do we know we’re maximizing our deductions to accomplish this? It depends on whether you choose to take the standard deduction or itemize your deductions. Most taxpayers find it more financially rewarding to take the standard deduction. In addition, itemizing deductions can be tedious work and meticulous expense tracking throughout the year. If you itemize, you can deduct expenses like:
- Charitable deductions
- State taxes paid
- Mortgage interest
- Property taxes paid
- Some medical and dental expenses
How do you know which option is best for you? It depends on how many deductible expenses you had for the year, as well as the standard deduction amount for your filing status. In 2023, the standard deductions are:
- $13,850 for single filers and married couples filing separately
- $20,800 for heads of household
- $27,700 for married couples filing jointly and surviving spouses
You can fill out a Schedule A on Form 1040 to see the total amount of itemized deductions you have for the year. If your itemized deductions do not exceed the standard deduction for your filing status, you should take the standard deduction as it will result in a lower taxable income.
Next week, Phil will discuss an important update about IRS revenue officers. See you next Friday!
If You Want to Maximize Your Deductions, Contact Us Today for a Free Consultation