In this week’s post, we will elaborate on a concept that can help anyone with their tax planning before the end of the year.
IRS allows you to decide every year whether you take the standard deduction or itemize deductions. Your tax preparer will choose the highest to reduce your taxable income. To briefly touch on the difference of taking a standard deduction or itemized deduction, standard deduction is an allowable amount given by the IRS and itemized deductions are eligible expenses that taxpayers can claim (in lieu of the standard deduction). Most taxpayers fall short of taking advantage of itemized deductions because they cannot accumulate enough expenses to exceed the standard deduction.