LdiJ
Senior Member
What is the name of your state? NA
Its clear that many people don't understand the difference between taking a standard deduction and itemizing....so I am going to attempt to explain it .
Everyone has the right to a standard deduction. For 2006 that 5150 for singles, 7550 for head of household and 10300 for married filing jointly.
However, if certain expenses are greater than your standard deduction, you have the right to file a schedule A and itemize your deductions.
Itemized deductions include:
Medical and medical insurances expenses (that aren't pre-tax expenses such as employer provided medical insurance) that exceed 7.5% of your adjusted gross income. So, if you have a 50k income and 10k in medical expenses, then only 6250 is decutible.
State income tax or sales tax, whichever is greater.
Real estate/property taxes/personal property taxes.
Home mortage interest.
Charital donations (receipts required)
Unreimbursed by employers job related expenses (lots of rules) and a host of other expenses that exceed 2% of your adjusted gross income. So again, if you have 50k in income then only expenses that exceed 1000.00 are deductible.
Gambling expenses to the extent of gambling losses.
Hobby expenses to the extent of hobby income.
Generally someone that doesn't own a home or doesn't have really serious medical expenses won't have enough itemized deductions to exceed their standard deduction, so many/most of them are better off taking their standard deduction. Even those owning a home often won't be able to itemize because interest rates are so low these days.What is the name of your state?
Its clear that many people don't understand the difference between taking a standard deduction and itemizing....so I am going to attempt to explain it .
Everyone has the right to a standard deduction. For 2006 that 5150 for singles, 7550 for head of household and 10300 for married filing jointly.
However, if certain expenses are greater than your standard deduction, you have the right to file a schedule A and itemize your deductions.
Itemized deductions include:
Medical and medical insurances expenses (that aren't pre-tax expenses such as employer provided medical insurance) that exceed 7.5% of your adjusted gross income. So, if you have a 50k income and 10k in medical expenses, then only 6250 is decutible.
State income tax or sales tax, whichever is greater.
Real estate/property taxes/personal property taxes.
Home mortage interest.
Charital donations (receipts required)
Unreimbursed by employers job related expenses (lots of rules) and a host of other expenses that exceed 2% of your adjusted gross income. So again, if you have 50k in income then only expenses that exceed 1000.00 are deductible.
Gambling expenses to the extent of gambling losses.
Hobby expenses to the extent of hobby income.
Generally someone that doesn't own a home or doesn't have really serious medical expenses won't have enough itemized deductions to exceed their standard deduction, so many/most of them are better off taking their standard deduction. Even those owning a home often won't be able to itemize because interest rates are so low these days.What is the name of your state?