Is the IRS Standard Deduction the Best Choice for 2014?

Deciding whether to go itemized or standard deductions for your taxes is really about what is going to be the best deduction amount you will see.

The amount of the standard deduction is going up a small amount in 2014.  This increase is all thanks to the inflation adjustments the IRS makes every year to approximately 40 tax provisions.

Standard Deductions for 2014:

For singles or married people filing separately = $6,200

For head of household taxpayers = $9,100

For married couples filing jointly and qualified widows/widowers = $12,400

In comparison to 2013, this increases to $100 for singles, $150 for head of households, $200 for married joint filers

Would you do well by filing with the standard deductions or do you think you’d be better off with itemizing?  If you have your receipts, you might want to add them up and see what itemizing would do for you.  You’re the one who will have to make the final call on this one.

Should I Go Standard?

There are two very good reasons that many folks choose to go with the standard deduction:

The most obvious is that it’s very easy to do.  The IRS prints the standard amount on the 1040A and 1040 Forms. Also you do not have to hand in receipts in order to make your claim.

The other reason is the standard deduction amount is usually more than with an itemized expense.

About the only exception that keeps people from using the standard deduction is home ownership. Mortgage interests and property taxes are usually enough to exceed the standard amount.  Adding into that mix are any charitable donations you may have made.  You will need to fill out a Schedule 1040A.

If you either have not owned your home long enough where you are no longer paying a great deal of interest, or you don’t own a home then the standard deduction is the best route for you to take.

You Should Pick The Larger Deduction:

Every year you are given the option to use either the standard or itemized method of filing.  As nothing is written in concrete, you might want to read up to see which will suit you best.

On January 1, 2014, you should look into the new standard deduction amounts and then decide whether you should hang on to your receipts for the year or not.

Overall:

Always read up on and become familiar with any new tax laws that have come down the pike, affecting your tax filing.  If you have someone filing your taxes for you, always make sure they have all records and receipts needed for them to file your returns quickly and easily.

How TurboTax Can Help

When you file your taxes with TurboTax we help you get your biggest refund by asking you simple questions, showing you which tax credits and deductions you qualify for and recommending the best choices for maximizing your refund. Try their free tax refund calculator to see how big your refund will be.

Remember, when you file your taxes with TurboTax, you don’t need to know which tax forms to fill out. We’ll ask you simple questions about your life and put your answers on all the appropriate forms.

 

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