Standard Deduction Vs. Itemizing
— -- Think you need to itemize for maximum tax savings? Think again.
If you're among the two-thirds of taxpayers who do not itemize, you might think you're getting the short end of the stick. After all, itemizers get to deduct state income tax, property tax, mortgage interest and all charitable donations.
"Non-itemizers actually get the better deal," according to Kevin McCormally of Kiplinger's Personal Finance Magazine. "The only reason to claim the standard deduction is when it's worth more to you than the total of all your deductible expenses," said McCormally.
Single taxpayers get a standard deduction of $4750, a married couple $9500 and that's with no questions asked. Even if they don't spend a nickel on state or local taxes, mortgage interest, or gifts to charity.
For most taxpayers, especially those without mortages, the standard deduction may be the best and they still might have some write-offs. However, keep in mind for certain exceptions to that rule.
"There's a $250 deduction for teachers and teachers aides, and a $3,000 write-off for college tuition," said McCormally. "You can deduct your qualifying moving expenses whether or not you itemize, as well as interest paid on student loans, or traditional IRA contributions you made."
Click here for interactive tax explainers and calculators
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