Form 1098: Is it worth it to itemize to get a bigger refund or would you just do the 1040EZ?

Question

I have my form 1098 information about the interest paid and property taxes paid in 2007. I could go the long route and itemize it all, but this is getting difficult.
Could I just do a 1040EZ and call it a day?
IF so, what about interest and property taxes that I payed in '06 out of escrow? Is the 1098 just for my own records?

Answer 1

Mostly it isn't worth it, unless you have mortgage interest payments or some big deducible expense like medical costs. But do make sure you don't have some reason to do it.

Answer 2

If your question is, are you legally allowed to just ignore the 1098 and file the 1040EZ taking the standard deduction, yes you are. It's your choice whether to itemize or take the standard deduction, if you have enough eligible expenses to itemize.

The property taxes shown on the 1098 IS the amount of tax paid out of escrow, not necessarily what you paid in. The interest shown is the amount of your payments that was charged as interest by the lender.

Depending on your filing status, how much is shown on your 1098, and what other deductible expenses you have, it might or might not be worthwhile to itemize.

If your income is under around $40,000, see if you can find a VITA site near you and ask them to prepare your return for you. See irs.gov for more info on the VITA progrram - put VITA in the search box. There is no charge for VITA to prepare your return.

Answer 3

Is it worth it to itemize if you get a bigger refund by itemizing????? I suppose that really depends on how much your itemized deductions are versus the standard deduction. The way I see it, if your itemized deductions are larger than the standard deduction, and you don't claim itemized, you are just throwing away money that is rightfully due to you. You are basically giving the government a gift. I suppose it is all relative to what you consider the opportunity cost of going to the trouble to itemize is. For some people, an extra $5 refund is worth it, as long as it doesn't cost them any extra money out of their pocket to get that $5 other than their time. For others, $100 isn't enough to make them want to even bother.

Answer 4

I think if you don't want to itemize you don't have to. But if you do not, then you have to forget about the interest, property taxes, etc. It can't be done both ways.Then the 1098 will be just for your records.

Answer 5

i dont know about you, but i would definitely rather itemize if i could. why wouldnt you want to take advantage of the bigger deduction?

if youre filing single, your standard deduction is $5,150. see if your itemized deductions are greater than this amount. use your mortgage interest paid, real estate taxes paid (should be reported on 1098, unless you pay taxes yourself), charitable contributions, etc. im sure its worth it for you to itemize on schedule A.

Answer 6

You need to add up all you itemized deductions and see if you have more than the standard deduction. If its close but slightly over, I would still use the EZ form because you have almost no chance of being audited.

Answer 7

It depends on the dollar amount that you would be able to itemize. It may be less than the standard deduction you would get on the EZ. You'd have to do the math and determine which is best for you based on your situation.