Itemizing deductions can reduce your tax liability. This might help you get more money back from the IRS. Or, it can mean you won’t owe as much if you need to make a payment. To itemize your deductions, you must use the 1040 tax forms. You also need Schedule A.
Because the 1040A and 2010 IRS tax forms 1040EZ are the “easy” version of the 1040, you can’t use these for this purpose.
Should I Itemize?
Finding all the different items you want to include on your IRS tax forms can take a while. Itemizing is probably why taxes have gotten a reputation as being difficult. Locating receipts, calculating taxes – all this takes a lot of effort.
In the long run, it may not be worth it. The standard deduction the IRS offers is often better than an itemized deduction. Not just for ease, but for tax liability. However, it may be useful to try it anyway. If you find the standard helps more, simply choose that option on your 2010 IRS tax forms instead.
Another thing to consider is if you have receipts for all the deductions. Each deduction needs proof. If you didn’t keep good records, it may not be worth your time. If you opt out of itemizing, you may be able to use tax forms 1040EZ.
What to Itemize
You use Schedule A to figure out your deductions. After completing this form, you’ll enter the total on your 1040 tax forms.
Schedule A is split into different sections. The first is medical and dental expenses. Often, this section requires a huge amount of expense to be worth it. If you had a major accident or surgery this year, claim it.
The next section on these 2010 IRS tax forms is taxes you’ve paid. You can claim real estate, motor vehicle, or even state and local taxes. After that is interest you’ve paid. This covers investment and home mortgage.
Charitable donations can be entered in the next section of the IRS tax forms. Anything donated to an approved charity can be itemized. Also, casualty and theft losses can be claimed. Hopefully you’re unable to fill this section out!
The last two sections are for job expenses and miscellaneous deductions. Anything entered in the miscellaneous section must be fully explained on the 2010 IRS tax forms. Like everything else, you must have receipt proof of it.
Now, add it all up and transfer the total to your 1040 IRS tax forms.