Tax strategy

[MS1205]

• How can I make sure I get all the tax breaks I qualify for? Is there a tax strategies guide to review?
• Is it better to Itemize deductions or take the Standard deduction?
• Is it better to file married filing jointly or separately?
• What Is Roth IRA and is it better than 401K?

[DawnC]

Most people take the standard deduction, but if you have more itemized deductions, you should take the higher deduction - See More on Itemizing.

MFJ is better than MFS in almost even situation - Compare MFS vs MFJ

Roth IRA will be not be taxed when you withdraw the money, you contribute post tax money.   Traditional IRAs and 401K are the opposite - you contribute tax free money, but you pay tax when you withdraw it.   Retirement plans

Tax Strategies

[JamesG1]

Follow the flow of the TurboTax product.  The software guides you through the process of preparing the tax return.  See this TurboTax Help.

Every taxpayer is permitted to use a Standard Deduction.  For a Single taxpayer in 2024 the Standard Deduction is $14,600.  However, you may choose to Itemize Deductions.  In most cases, taxpayers claim itemize deductions because the deductible expenses exceed the Standard Deduction.  See this TurboTax Help.

Which is better, filing married filing jointly or married filing separately depends upon the circumstances within your tax return and the issues surrounding the tax partners.  See this TurboTax Help.

A 401(K) is a pension plan managed by your employer.  You have no control over the features that the employer offers for the pension plan.

A Roth IRA is a pension plan is established by the taxpayer and managed by the taxpayer.  There is no deduction on the current year's tax return for deposits into a Roth IRA.  See this TurboTax Help.

[KrisD15]

TurboTax has plenty of tips and tricks to guide you. Google a topic and TurboTax to get a link. For example "Tax Breaks TurboTax" gets you this link.

HERE is a link about Credits 

HERE is a link with a calculator for choosing  Standard Deduction vs Itemizing Deductions

The IRS also issues publications. 

The TurboTax application asks (a lot) of questions in the tax interview to get an idea of which credits and/or deductions might be useful to you.

The choice between taking the Standard Deduction or Itemizing Deductions is almost always based on which is the higher deduction. Deductions lowers your taxable income. Less taxable income means less tax.

(But there are exceptions, such as when filing married Filing Separately, then you must both use the same method)

The better choice of filing Married Filing Jointly or Married Filing Separately is almost always Married Filing Jointly. Certain credits cannot be claimed on a Married Filing Separately return. Credits lower you tax liability. 

(But there are exceptions to when a person may prefer filing married Filing Separately) 

The choice of Roth IRA versus Traditional IRA depends on when you want to pay the tax on the income. 

Contributions to a Roth are after tax, where a contribution to a traditional  IRA may be deductible, so there is no immediate tax advantage for a Roth IRA. The advantage is when the distributions from a Roth are made since the earnings are not taxed if the distribution is qualified, meaning you meet the holding requirements as well as personal information, such as your age. There is also no Required Minimum Distribution for the original owner of a  Roth account. 

Although Deductions and Credits, Filing Status, and different saving and investment instruments can be explained, the situation of the individual is also a factor. 

We are here to help with a particular question or issue you may have when filing your taxes using TurboTax. There are also many "Learn More" links embedded in the software that address questions associated with the section you're in. These are very informative.