When filing your taxes, you will often have to choose between itemizing your deductions and taking a standard deduction. You should determine the amount of your deductions using both methods, then select which option reduces the amount of tax you owe. The method that leads to the greatest deduction typically provides the greatest credit. How to determine Itemized Deductions: First, you will have to calculate the total amount of all deductions individually in a list. Any expenditure you paid during the year may include: Interest paid on a mortgage loan either sales tax or state and local income tax (choose one). Charitable donations Losses due to theft or casualties Medical expenditure not covered by a third party Business expenditure or work expenditure not reimbursed Taxes paid on real estate and personal property What is the standard deduction? If you choose not to specify your deductions, the standard option based on your filing status can be selected.

The standard deduction for 2018 is this: $12,000 for single filers and separate married filers, $24,000 for married filing jointly filers and $18,000 for head of household.

If you are over 65 or legally blind, the standard deduction rate is higher. In addition, if you can be claimed by anyone else as a dependent, your deduction may be limited. Which one should be used? For each deduction option, you will have to check the requirements, as some taxpayers are not eligible for a standard deduction and are forced to itemize. The other spouse may also be required to do so if a married couple files separately and one spouse chooses to itemize. When you decide which option to choose, you should carefully determine the method for which you are eligible and which benefits the most.