Choosing the standard tax deduction over itemizing could cost you. Sure, the standard deduction is easier, but before you make that decision, be sure to crunch some numbers first. It could result in significant savings.

Itemizing vs. Standard Deduction

 

Standard deduction is a flat amount that you can deduct from your taxable income. The amount to deduct depends on your filing status, number of dependents, and the year you’re filing taxes for. For tax year 2017, the standard deduction is:

 

  • $6,350 for single taxpayers and married couples filing jointly
  • $12,700 for married couples filing a joint return
  • $9,350 for heads of household  

 

Itemizing deductions involves deducting the actual dollar amount of different expenses. Various expenses may be included on your list of itemized deductions. The most common ones are:

 

  • Mortgage interest
  • Property taxes
  • Medical expenses
  • Student loan interest
  • Charitable contributions
  • State and local income taxes
  • Job searching expenses
  • Moving expenses
  • Gambling losses
  • Other miscellaneous expenses exceeding 2% of your income

 

If your total itemized deductions is greater than the standard deduction, it would make sense to itemize. Check out Schedule A of IRS Form 1040, where you can list your itemized expenses. If the total is less than the standard deduction, then you may want to stick the standard deduction. Either way, crunch some numbers and consult a tax expert if necessary.