Should I itemize when vast majority of my income is W-2, but have $2,000.00 in business expense related to $1,700.00 in 1099 insurance sales?

[AmandaR1 · Accepted solution]

The fact that the majority of your income is reported on a W-2, doesn't affect if you should take the Itemized or Standard Deduction.  Deducting your self-employed expenses, related to business income (reported on form 1099-misc box 7), is not an itemized deduction. Instead, these are expenses deducted directly from income before tax.

Itemized deductions primarily include, mortgage interest, property taxes, charitable deductions and state income taxes. While there are numerous other itemized deductions, many are subject to limitations, such as employee job expenses, which are limited to 2% of AGI (an income subtotal on your personal main tax form).

You only deduct Itemized Deductions, if the total is greater than your Standard Deduction amount of $6,300 (single) or $12,600 (married). To see a comparison on where your total itemized deductions are compared to the standard deduction, click "Done with Deductions" at the bottom of the "Deductions & Credits" listing. You'll come to a screen that reports which deduction was better for your situation. On this  screen, check the box to take the alternative deduction and you'll see a comparison.