Decide whether to itemize deductions by comparing your total mortgage interest, state and local taxes (capped at $10,000), medical expenses over 7.5% of income, and charitable donations against the standard deduction for your filing status. Itemize if your total is higher.
If you're someone with a lot of deductible expenses, itemizing might be your best choice. Here's what you can deduct: mortgage interest, state and local taxes up to $10,000, medical expenses, but only the part that exceeds 7.5% of your income, and charitable donations. If adding these up gets you over the standard deduction, then itemizing is for you. Here's what you need to do. Gather your documents: receipts, mortgage statements, medical bills, charitable donation records, anything that proves your deductible expenses. Use Schedule A, Form 1040. This is where you list each deduction category. Do the math. Add up your deductions and see if they exceed the standard deduction for your filing status. If your total deductions are higher, file with confidence. You just legally kept more of your money. If the total is less, stick with the standard deduction. A tip you can utilize now is keeping organized records year-round. This makes itemizing a lot less painful when tax season hits.
