Brandy – “Decisions”
Choose Your BEST Deduction!
Once again it’s almost tax time (sorry…didn’t mean to bring you down) and we continue “Tax Week” on the Fabulous Portland Blog. On Monday I posted a long list of documentation you might need to prepare your taxes. However, some other “stuff” to consider: one third of all U.S. households, 75% of households with more than $75,000 income and most homeowners itemize their deduction on their federal income tax returns (according to the IRS). Of course, this (usually) makes sense because the interest paid on their mortgage and their property taxes probably exceeds the allowable standard deduction. However, with interest rates as low as they have been in the last two years it is possible that the standard deduction may be the better choice for some.
Each year, any taxpayer can compare the total of the itemized deductions to the standard deduction to select which method will result in the most benefits. The 2011 standard deduction is $11,600 for married couple filing jointly and $5,800 for single filers.
The Housing and Economic Recovery Act of 2008 allows homeowners to take “the standard deduction and the lesser of their actual property taxes or $1,000 if filing their return married jointly”. For more information, see Schedule L found on www.IRS.gov and consult your tax advisor.
Here’s a great article about enjoying what tax deductions we currently have while we can!!
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