Standard deduction vs. itemized deductions

Deciding on how to take your deductions is not easy sometimes. But that is how much to you should subtract from your adjusted gross income. By doing this you are reducing your taxable income. And this can make a huge difference in your tax bill.

The standard deduction is for the most part a flat reduction in your adjusted gross income. The amount of the determined by Congress  which is meant to keep up with inflation.

Here comes a little surprise because almost 70% of filers take it and this is because it makes the tax-prep process quick and easy.

When it comes to the people who choose itemize tend to do so is because their deductions add up to more than the standard deduction, which means that it is saving them money

The IRS are a great tool because it allows you to deduct a litany of expenses from your income. However the record-keeping is key.

You need to be able to prove (usually with receipts) that the expenses which you are doing are deducting are valid. And this means putting in effort but it also might sometimes means savings.

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