how do you itemize your tax deductions?

Answer 1

There are certain expenses that the IRS allows you to deduct from your personal income. (If you buy certain things, they don't tax the money that you had to use to buy these items). The IRS figures that most single people spend about 5150 on these items and a single person with a child/children spends about 7500 and married people spend about 10,500. These are the standard deductions. If you know that you spent more than this (and have receipts to prove it) you can itemize your deductions.
Some examples of things that can be deductions are:
Property taxes (car and home), Home mortgage interest, Medical expenses that exceed 7.5% of your gross income, etc. I'm sure you get the picture. You can always check the irs website to see what types of expenses qualify.

Answer 2

Do you understand what itemizing is?

The purpose of itemizing is to lower your taxable income.

When preparing your tax return the first thing you need to do is determine the amount of income earned from all sources, which will give you the amount of your adjusted gross income (AGI). This would be your taxable income if the IRS didn't allow you to start subtracting things like your itemized or standard deduction, and your exemptions (the number of people on your tax return - for 2006 you can subtract $3,300 for each exemption to help lower you taxable income.)

http://www.irs.gov/pub/irs-pdf/f1040sab.pdf

If you look at the Schedule A from the link above, you will see that most of what helps you to be able to itemize are things like mortgage interest, property taxes and charitable donations (medical expenses and unreimbursed employee expenses usually do not help as they have to exceed a certain percentage of your AGI before you can count them).

So because the IRS lets you LOWER your taxable income you can subtract either the standard deduction allowed by the IRS (i.e., for single people in 2006 you would subtract $5,150), OR subtract the amount you determined to be your itemized deductions using Schedule A. If your ITEMIZED deductions amount to MORE than the STANDARD deduction, then you would obviously benefit by LOWERING your taxable income and using the itemized deduction.

If, for example, you are single and your itemized deductions were only $3,000 then you would NOT want to itemize. You would be better off lowering your taxable income by $5,150 (the standard deduction allowed by the IRS) instead of $3,000.

Answer 3

Itemizing deductions means using Schedule A of Form 1040. Schedule A includes medical expenses, state and local taxes, real estate taxes, mortgage interest, charitable contributions, and miscellaneous expenses as main sections.

You record your deductions in each of these areas. If the total is more than your standard deduction (which is $5,150 for Single, $7,550 for Head of Household, $10,300 for Married Filing Jointly), then you get to take the total from Schedule A instead of the standard deduction off your income.

Here is Schedule A:

http://www.irs.gov/pub/irs-pdf/i1040sa.pdf

Answer 4

time-honored deduction in basic terms potential you're keen to settle for an time-honored volume on your deductions quite than checklist them separately. Yoy get an avearage charity deduction, an time-honored atx deduction, and classic playing loss deduction and so on. some would be bigger than your specidfic expenditures, and a few would be lowere in spite of the shown fact that it averages out. in case you itemize in 2009 and declare say $3000 state tax considering that become withheld, then you definately get a reimbursement of $500 from the state., you will owe tax on that $500. I fyou took the standar deduction you widespread the time-honored volume fro state taxes and the IRS accepts it too so no rely your withholding or taxes,you do no longer owe naything greater.

Answer 5

by listing them...