How to Determine if You Can Itemize Tax Deductions

Video Transcript

"I've got lots of paper all over my office. I'd sure like to get rid of some of it if I don't need it. And one of the things that makes a lot of paper in my office are the receipts that I save so that I can itemize them on my tax return. But how do you even know if that's possible? I'm Kristen Brand and I'm going to show you a few things that will indicate whether you can itemize on your tax return. The first thing you'll need to figure out is what your standard deduction is. In order to do that, you can find a form 1040 and look at page 2. If you look at page 2 over here in the column, you'll see detail on what the standard deduction is for you if you're single, married filing jointly, married filing single or head of household. That will give you the number that have to beat in order to make itemizing beneficial for you. So if your stack of receipts adds up to more than this, then you're qualified to itemize. Typically it helps if you've got something big that will knock you over that threshold like if you own your own home, the interest on that mortgage is usually enough to get you pretty close to that number. And then you'll have to add some other things on top of that. But if you can't pass that threshold, then the standard deduction will actually be better for you and that will eliminate a lot of paperwork on your part. I'm Kristen Brand and that's how you itemize on your tax return."