Skip to main content

You are here

Should You Itemize?

By David Luhman on Mon, 05/11/2009 - 23:59

Should You Itemize?

Should you itemize?

Itemized deductions phased out for high-income individuals

How to bunch expenses to get the most out of itemizations

Should you itemize?

Itemize if your allowable deductions exceed your standard deduction

Filing status Standard deduction
Single $3,900
Head of household 5,750
Married, filing jointly 6,550
Married, filing separately 3,275

Unless you own a home (and therefore have substantial property taxes and mortgage interest), it's probably best to take the standard deduction

You also might want to itemize if

  • You or a dependent had serious medical payments not reimbursed by insurance
  • You suffered a major theft or casualty not reimbursed by insurance
  • you gave a lot to charity
  • You have significant job-related expenses

Only 25 percent of taxpayers itemize

Itemized deductions phased out for high-income individuals

If you itemize and have a high income (AGI over $100,000) you will lose some of your itemized deductions

Part of 1990 tax increase

Good example of how ridiculously complex our tax code can become just to squeeze out a little more money

How to bunch expenses to get the most out of itemizations

For most taxpayers, items are deductible in the year of payment

To maximize use of both the standard deduction and itemized deductions, bunch your deductible payments into those years when you plan to itemize

Here's what you might want to do if you plan to itemize this year

  • Double your payments to a charity and skip next year's contribution
  • Prepay your HMO premiums which are deductible as a medical expense
  • Prepay your property taxes for next year -- if they've already been assessed

You can't prepay too far in advance

Trying to deduct the next five years worth of HMO payments, even if actually paid, won't be fully deductible

Premium Drupal Themes by Adaptivethemes