Tax Tip: When Should You Itemize?
(NEW YORK) — Some pay more money in taxes than they should, as many people don’t realize they can itemize their deductions.
“A common deduction that they don’t think of are state and local taxes paid,” says tax accountant Janice Hayman. “All they have to do is look at their W-2 for state and local taxes.”
Hayman says if you are above the threshold for itemizing, it can make a lot of sense to do this.
“It really does help. A lot of people think, ‘Oh I won’t take just the standard deduction because then they won’t audit me,’ but many times a simple itemization won’t be audited because it’s all documented by outside sources,” Hayman says.
But Kathy Pickering of H&R Block says the tactic isn’t for everyone: many taxpayers don’t have enough expenses to itemize.
“For the extra complexity of doing itemized deductions, if you don’t get any additional tax benefit, then you may want to save yourself that additional effort,” she says.
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