Itemize Deductions for a Higher Federal Tax RefundPublished:
Taxpayers might not want to itemize their deductions for several reasons. For one, they may not want to take the time. They might also want to use tax form 1040-EZ, which doesn’t allow itemized deductions. One of the most common reasons people don’t itemize is that they don’t know what exactly can itemize.
Itemizing can actually give you a much higher federal tax refund status. Taxpayers saved around $1 trillion when they chose to itemize instead of simply claim the standard deductions. If you’re ignoring the option to itemize, you might not be getting the highest refund status you can get.
Items You Can Include
There is a long list of items you can itemize to achieve a higher federal tax refund status. Here are some of the most common:
- Medical and Dental Expenses ‘ Some major medical and dental expenses can be itemized.
- Local and State Taxes ‘ Various local and state taxes, including property taxes, can be itemized. These can significantly improve your federal tax refund status, especially if you have more than one property. This includes rental homes.
- Mortgage and Investments in Home ‘ If you paid mortgage interest or invested in improvements for your home this year, include those for a higher refund status.
- Charitable Donations ‘ Giving to charity is another overlooked deduction that can help your federal tax refund status. This can include donating clothing to Goodwill or a money donation to a local shelter. These can lead to a better federal tax refund status. Make sure you have receipts to back these claims up, however.
- Other Miscellaneous Deductions ‘Other deductions for a better refund status include theft and casualty losses. Also any job expenses for which you haven’t been compensated already. Even tax preparations fees can be itemized! If you feel you have other possible deductions that aren’t included on the form, simply write them in. Be prepared to back these up with proof.
Choosing Between Standard or Itemized
After itemizing you may find your standard deduction would bring more money. This does happen and is totally fine. There’s no sense in choosing less money even if you did all that work. Go for whichever option gives you the higher refund status!
There are really only two times you should choose the itemized deduction refund status if it’s lower than the standard. If you’re filing as married but separate and your spouse is filing itemized, you should do so as well.