Community Corner

Last Minute Tax Tip: Itemize or Take the Standard Deduction?

Each option has its own pros and cons.

There isn't much time left to get your taxes in (at least not without a penalty if you owe) so here are some tips to help you decide whether to itemize or take the standard deduction.

First things first: How much is the standard deduction?

For 2010:

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Single $5,700 Married Filing Jointly $11,400 Head of Household $8,400 Married Filing Separately $5,700 Qualifying Widower $11,400

Wondering which category you fall into? Take a second and read this short article:

Generally, you'll only want to itemize if your deductions amount to more than the standard deduction. Some people may have certain reasons for itemizing, even with amounts lower than the standard deduction, but this is the general rule. One thing to note: Your itemized deductions aren't limited anymore by your adjusted gross income, or AGI.

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Some people aren't eligible to take the standard deduction:

  • Nonresident aliens.
  • Dual-status aliens.
  • Individuals who file returns for periods less than 12 months due to a change in accounting periods.

You also can't take the standard deduction if you are married filing separately but one spouse decides to itemize, and vice versa. Sorry—you can't agree to disagree on this one!

So which forms can you use to take the standard deduction?

  • 1040
  • 1040EZ
  • 1040A

According to IRS Publication 501, you will need to attach Schedule L if you qualify for a standard deduction increased by:

  • "Any state or local sales or excise taxes you paid in 2010 on the purchase of a new motor vehicle after Feb. 16, 2009."

  • "Any net disaster loss you had in 2010 because of a disaster that occurred before 2010 and was declared a federal disaster after 2007."

To itemize, use Form 1040 and Schedule A, Itemized Deductions.

For forms and more information, visit www.irs.gov.

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