The standard deduction is a fixed amount set by the IRS, while itemized deductions require listing specific deductible expenses.

If your total itemized deductions exceed the standard deduction , it’s beneficial to itemize for greater tax savings.

Yes, you can choose between the standard or itemized deduction annually, depending on which offers the most tax savings.

Yes, since itemized deductions require documentation, they may be subject to more scrutiny compared to the standard deduction .

Yes, some itemized deductions have limits, such as SALT deductions capped at $10,000 and medical expenses exceeding 7.5% of AGI.

Question 1

What is the difference between the standard or itemized deduction?

Accepted Answer

The standard deduction is a fixed amount set by the IRS, while itemized deductions require listing specific deductible expenses.

Question 2

When should I choose itemized deductions over the standard deduction?

Accepted Answer

If your total itemized deductions exceed the standard deduction, it’s beneficial to itemize for greater tax savings.

Question 3

Can I switch between standard and itemized deductions each year?

Accepted Answer

Yes, you can choose between the standard or itemized deduction annually, depending on which offers the most tax savings.

Question 4

Do itemized deductions increase the risk of an IRS audit?

Accepted Answer

Yes, since itemized deductions require documentation, they may be subject to more scrutiny compared to the standard deduction.

Question 5

Are there limits on certain itemized deductions?

Accepted Answer

Yes, some itemized deductions have limits, such as SALT deductions capped at $10,000 and medical expenses exceeding 7.5% of AGI.