Should You Itemize on Your 2019 Taxes?
AP

Should You Itemize on Your 2019 Taxes?

  • 0
{{featured_button_text}}
Should You Itemize on Your 2019 Taxes?

At this point during the tax season, you should be starting to gather your documents and thinking about filing your return. But whether you decide to go it alone or enlist the help of a tax professional could hinge on one key point: whether you're taking the standard deduction on your 2019 taxes or are planning to itemize.

Filing a return using the standard deduction is simple -- you copy over the details of your W-2 and 1099 forms, and then apply the deduction you're eligible for based on your tax-filing status. For your 2019 tax return (the return you're filing this year), the standard deduction is:

  • $12,200 for singles and married couples filing separately
  • $18,350 for heads of household
  • $24,400 for married couples filing jointly

If you opt for the standard deduction, your math is pretty uncomplicated, and your legwork is minimal. If you itemize, you could snag an even larger tax break, but it'll take more of an effort, and your savings may not be that much more substantial. The question is: What's the right move for you?

Image source: Getty Images.

When does it pay to itemize?

Let's get one thing out of the way: If you don't have enough eligible deductions to exceed the aforementioned figures, then itemizing makes no sense. For example, if you're a married couple filing jointly with $18,000 in itemized deductions, you'd lose out by going that route, since you'd otherwise be entitled to a standard deduction that's $6,400 higher. And to be clear, what all deductions do is exempt a portion of your income from taxes, so you want the most substantial deduction possible.

Now, what if your itemized deductions exceed what you're eligible for via the standard deduction? Should you automatically itemize?

Not necessarily. As mentioned earlier, itemizing is complicated, and it opens the door to mistakes and, in some cases, tax audits. The mere act of itemizing itself won't raise a red flag with the IRS, since it's a common practice, but if some of your itemized deductions appear suspicious (for example, a precise $5,000 deduction for medical expenses), or they're really high relative to your income (for example, deducting $15,000 in mortgage interest with $45,000 in reported earnings), it could spell trouble. As such, if your itemized deductions will barely put you above the thresholds for the standard deduction, they may not be worth it, especially since itemizing also opens the door to innocent mistakes that could land you on that dreaded audit list.

On the other hand, if your itemized deductions well exceed the standard deduction you're entitled to, then itemizing certainly pays. You can take a deduction for:

  • Mortgage interest on a home loan up to $750,000, or up to $1 million if your loan was signed before Dec. 15, 2017.
  • State and local taxes, including property taxes, up to a total of $10,000.
  • Charitable donations, including the donation of goods.
  • Medical expenses that exceed 7.5% of your adjusted gross income.

Keep in mind that there are certain deductions you can claim without itemizing, including:

These deductions should not be factored into your calculations when running the numbers to determine whether to take the standard deduction versus itemize; you should treat them separately.

What's the best move for you?

The best way to determine whether you should itemize on your 2019 return versus stick with the standard deduction is to get moving on your taxes sooner rather than later. Only once you run some numbers will you be in a position to make that call, and if it turns out you're looking to itemize but want a tax professional's input, you'll need to act quickly to line up that help ahead of this year's April 15 tax deadline.

The $16,728 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $16,728 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

The Motley Fool has a disclosure policy.

0
0
0
0
0

The business news you need

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Related to this story

Most Popular

Get up-to-the-minute news sent straight to your device.

Topics

News Alerts

Breaking News