What does itemizing my deductions mean?

By Jason Watson (Google+)

The IRS provides a standard deduction of $5,950 for single and $11,900 for married taxpayers (for the 2012 tax year). This deduction reduces your gross income. However, if the total of the following deductions exceed the standard deduction, then you can “itemize” your deductions on your tax return which maximizes your tax refund-

• Medical Expenses (that exceed 7.5% of your income, can’t count premiums either)
• State Income Taxes
• Property Taxes
• Mortgage Interest
• Charity and Church
• Job-Related Expenses (per diem deductions, especially international, can be huge)

Myth Buster- Moving expenses, business losses, student loans, tuition expenses, etc. DO NOT factor into your ability to itemize your deductions. Unsure about your situation? – Just give us a call or send an email- we can quickly determine if you can itemize your deductions.

If you are able to itemize your deductions, but prepare your own tax returns without the flight crew per diem and expenses, you are leaving money on the table.

If you cannot itemize your deductions and you do not have any moving expenses, tuition expenses, etc., you can easily file your taxes online for about $30 in about 10 minutes (Federal is free, most states are $30ish). We are not trying to unnecessarily turn you away as a client, but at the same time we feel it is important for you to have this information- in other words, we would rather have you become a client in the future knowing that we were fair and honest today. However, if you still want us to prepare your tax return, we only charge $75 if we use the standard deduction and you have only a few tax forms.

If you have any questions about this, please call or email us for more information. We are always happy to assist you even if we don’t prepare your tax returns.