Welcome to the Carlsbad Tax and Accounting blog! This will be the first of many posts about various tax issues and updates to help and inform our current clients and potential new clients. This first post is about taking the standard deduction on an individual income tax return versus itemized deductions. Itemized deductions are one of the categories that offset adjusted gross income to reach taxable income. There is definitely some confusion in this area because people wonder things like how come I gave you all these unreimbursed employee business expenses to deduct on my tax return, but I don’t see them anywhere on the completed return? There can actually be multiple reasons for that (a topic for another post), but it is usually because the individual(s) didn’t have enough tax-deductible items that fall under itemized deductions like unreimbursed employee business expenses to exceed their standard deduction. The standard deduction amounts for tax year 2013 are as follows based on your filing status:
- Single or Married Filing Separately – $6,100
- Married Filing Jointly or Qualifying Widow/Widower – $12,200
- Head of Household – $8,950
Therefore, depending on your filing status you generally have to have a fair amount of itemized deductions (e.g. mortgage interest and property taxes) to exceed the standard deduction. Hopefully this post was helpful to anyone reading it and thank you for visiting our website!