Article Posted on 02/18/2022
Taxpayers have two options when completing a tax return, take the standard deduction or itemize their deductions. In general, we will pick the greater of the two. Here are some details about the two options:
The standard deduction amount increases slightly every year and varies by filing status. The standard deduction amount depends on the taxpayer's filing status, whether they are 65 or older or blind, and whether another taxpayer can claim them as a dependent. Taxpayers who are age 65 or older on the last day of the year and don't itemize deductions are entitled to a higher standard deduction.
Here is a chart for the 2021 Standard Deductions for each filing status:
Filing Status Standard Deduction Additional amount if over 65 or blind*
Single 12,550 1,700
Married Filing Separately 12,550 1,350
Married Filing Jointly 25,100 1,350
Surviving Spouse 25,100 1,350
Head of Household 18,800 1,700
*The additional amounts are per spouse and will be doubled if a person is both over 65 and blind.
Not all taxpayers can take a standard deduction which can be explained by your tax preparer if that applies to your special situation.
Taxpayers choose to itemize deductions by filing Schedule A. Itemized deductions that taxpayers may claim include:
State and local income or sales taxes (right now this is limited to $10,000)
Real estate taxes
Personal property taxes such as vehicle taxes
Home mortgage interest
Mortgage insurance premiums on a home mortgage
Personal casualty and theft losses from a federally declared disaster
Gifts to a qualified charity
Unreimbursed medical and dental expenses that exceed 7.5% of adjusted gross income
Please submit documentation of each itemized deduction to your tax preparer so they can determine which deduction will be greater for you.