Thursday, April 01, 2010

Want a Bigger Tax Refund? Don’t Itemize

Although itemizing can lead to a huge refund for some taxpayers, there are many others who benefit more from taking the standard deduction. If you think you may be one of those taxpayers that will get more for their buck by simply taking the standard deduction, read this article.

Year after year taxpayers spend hours hunting down and organizing all their receipts and canceled checks for totally legitimate deductions--gifts to charity, medical expenses, unreimbursed business expenses and so on. Then they're told by their tax professionals, (or discover while using software such as Intuit's TurboTax or H&R Block's At Home) that all their conscientious record keeping is for naught. Those itemized deductions won't be showing up on their tax returns, because they'll get a bigger refund by claiming the "standard deduction."

Often people are left feeling a little cheated and confused by the process. So it helps to understand why you may be better off not itemizing, particularly this year. Here are six reasons:

1. The standard deduction isn't so small or so standard.

The standard deduction is an amount assigned to each filing status. The base amount for 2009 is $5,700 for a single filer and double that--$11,400--for a married couple filing jointly. A head of household (a single parent with kids, for example) gets a standard deduction of $8,350. There are additions to these standard amounts for those who are blind or over age 65.

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