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Standard Deduction vs. Itemized Deduction

Standard Deduction: The standard deduction is a fixed amount set by the IRS that reduces your taxable income. It’s simple to claim and requires no additional documentation. For 2024, the standard deduction amounts are:

  • Single: $14,600
  • Married Filing Jointly: $29,200
  • Head of Household: $21,900

Itemized Deductions: Itemizing allows you to deduct specific expenses like mortgage interest, medical expenses, and state/local taxes, but it requires detailed documentation. If your total itemized deductions exceed the standard deduction, you can save more on taxes.

 

When to Choose Standard Deduction:

  • If your deductible expenses are less than the standard deduction.
  • When you want a simplified filing process.

 

When to Itemize:

  • You have significant medical, mortgage, or tax expenses.
  • Your deductions surpass the standard deduction limit.

 

Standard Deduction vs. Itemized Deduction

 

Standard Deduction vs. Itemized Deductions

 

Criteria

Standard Deduction

Itemized Deductions

Simplicity

Easy to claim

Requires documentation

Deductible Amount

Fixed by IRS, varies by filing status

Varies based on individual expenses

Best For

Those with lower deductible expenses

Those with high deductible expenses

Filing Process

Simple

More complex

Frequently Asked Questions

 

1. Which is better, standard deduction or itemized?

If your itemized deductions exceed the standard deduction, itemizing is better. Otherwise, choose the standard deduction for simplicity.

2. Can I switch between standard and itemized deductions each year?

Yes, you can choose either method annually based on which provides greater tax savings.

3. What are the standard deduction amounts for 2024?

For 2024, the amounts are $14,000 for single, $28,000 for married filing jointly, and $20,800 for head of household.

4. What expenses can be itemized?

You can itemize mortgage interest, state/local taxes (up to $10,000), charitable donations, medical expenses over 7.5% of AGI, and disaster-related losses.

5. Is there a limit to itemized deductions?

Some deductions, like state and local taxes, are capped at $10,000, but there’s no overall limit.

6. How do I know if itemizing is worth it?

If your itemized deductions exceed the standard deduction, it’s worth itemizing. Dimov CPA can help assess your situation.