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Should I Itemize Deductions?
Each taxpayer is allowed a "standard deduction", based on their filing status.
The standard deductions are:
| |
1998 |
1999 |
2000 |
2001 |
2002 |
2003 |
| Single |
$ 4,250 |
$ 4,300 |
$4,400 |
$4,550 |
$4,700 |
$4,750 |
| Married Joint |
$ 7,100 |
$ 7,200 |
$7,350 |
$7,600 |
$7,850 |
$9,500 |
| Head of Household |
$ 6,250 |
$ 6,350 |
$6,450 |
$6,650 |
$6,900 |
$7,000 |
| Married Separate |
$ 3,550 |
$ 3,600 |
$3,675 |
$3,800 |
$3,925 |
$4,750 |
Who Should Itemize
You should itemize deductions if your total deductions are more
than the standard deduction amount. Also, you should itemize if you do not
qualify for the standard deduction.
You should first figure your itemized deductions and compare
that amount to your standard deduction to make sure you are using the method
that gives you the greater benefit.
CAUTION! You may be subject to a limit on some of your itemized
deductions if your adjusted gross income (AGI) is more than $139,500 ($69,750
if you are married filing separately). See IRS Publication 17, Chapter 22
and the instructions for Schedule A (Form 1040), line 28, for more information
on figuring the correct amount of your itemized deductions.
When To Itemize
You may benefit from itemizing your deductions on Schedule A
(Form 1040) if you:
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Do not qualify for the standard deduction, or the amount
you can claim is limited,
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Had large uninsured medical and dental expenses during
the year,
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Paid interest and taxes on your home,
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Had large unreimbursed employee business expenses or other
miscellaneous deductions,
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Had large uninsured casualty or theft losses,
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Made large contributions to qualified charities, or
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Have total itemized deductions that are more than the standard
deduction to which you otherwise are entitled.
-
If you decide to itemize your deductions, complete Schedule
A and attach it to your Form 1040. Enter the amount from Schedule A, line
28, on Form 1040, line 37.
Itemizing for state tax or other purposes. If you choose
to itemize even though your itemized deductions are less than the amount of
your standard deduction, write “IE” (itemized elected) next to line
37 (Form 1040).
Changing your mind. If you do not itemize your deductions
and later find that you should have itemized — or if you itemize your
deductions and later find you should not have — you can change your return
by filing Form 1040X, Amended U.S. Individual Income Tax Return.
Married persons who filed separate returns. You can change
methods of taking deductions only if you and your spouse both make the same
changes. Both of you must file a consent to assessment for any additional
tax either one may owe as a result of the change.
You and your spouse can use the method that gives you the lower
total tax, even though one of you may pay more tax than you would have paid
by using the other method. You both must use the same method of claiming deductions.
If one itemizes deductions, the other should itemize because he or she will
not qualify for the standard deduction.
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