Itemized Deductions are a type of Allowable deductions in the federal income tax, in which actual expenses are considered instead of a fixed amount of Standard Deduction.
Taxpayers are allowed to choose any one type of allowable deductions in Form 1040 of Federal Income Tax.
They can either choose the amount of standard deduction fixed by IRS or choose to go for itemized deductions.
Generally, some of the itemized deductions which a taxpayer can claim are in following categories:
The Federal Tax Authority limits the itemized deductions when the AGI of a taxpayer exceeds a certain limit based on his filing status.
These limits are called Phase out limits for Taxpayers or Pease Limitations of Itemized Deduction.
Single – $ 261,500
Married Filing Jointly – $ 313,800
Head Of Household – $ 287,650
Married Filing Separately – $ 156,900
Source: www.forbes.com
You can calculate your AGI with our Adjusted Gross Income Calculator.
You can also download other excel templates like Traditional IRA Calculator, Roth IRA Calculator and Income Statement Projection for easy calculations.
When deciding to go for itemized deduction keep following points in mind:
A tax advisor will be helpful to you while deciding to go for itemized deduction. They will calculate your taxes in both the ways and suggest you the best option to go for.
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