01 May Standard Deduction Vs Itemized 2019: Which Should You Take
The Tax Cuts and Jobs Act changes a few things. One of the biggest changes was increasing the standard deduction. The increase was so drastic that most taxpayers will take it rather than itemize. However, it’s important to know the difference between the two deductions, how they work, and which one is better for you.
Important note: You can only take a standard deduction OR itemized deductions. You cannot claim both.
Standard Deduction Vs Itemized 2019
For 2019 returns, the standard deduction amount is $12,200 for individuals, $24,400 for those married filing jointly, and $18,600 for heads of household (those numbers are changing for your 2020 return!). That means for last year’s income, you get a deduction for one of the above amounts depending on your filing status. This will often knock off a decent amount on your tax bill.
Itemized deductions work a bit differently. The amount you take can vary, as it depends on what you qualify for. Charitable contributions, mortgage interest, property taxes, and many more items can all go toward your itemized deductions (see more examples for itemized deductions). However, if you choose to take them, make sure that the amount is greater than the standard deduction you would take instead. For example, if you’re married filing jointly, make sure your itemized deductions add up to more than $24,400. If not, then you’re losing out on money for no reason (not to mention doing some extra work on your return at a loss).
Who Usually Takes Each Deduction?
Most people will find themselves taking the standard deduction. Because the amount is so high, most won’t have itemized deductions that exceed that number. If you just get a W-2 form every year, odds are that you should take the standard deduction.
Those who itemize deductions are typically business owners. Business owners incur a lot more expenses and can use their resources to maximize their deductions across the board. It’s common for those people to itemize because they often get a lot more money back as a result. That’s not to say you should itemize if you’re a business owner, but it’s usually the best move.
Want to know more about the difference between standard deduction vs itemized 2019? Need help getting your taxes done this year? Give us a call at 614-524-4888 or 614-310-0506!