How does the federal itemized deduction differ from the standard deduction?
The standard deduction is a fixed dollar amount, based on your filing status and age, that the IRS lets you take off (deduct) from your taxable income.
On the other hand, the itemized deduction allows you to list (itemize) your deductions on Schedule A. Roughly a third of all taxpayers itemize.
The IRS lets you choose either the "bundled" standard deduction or the "a la carte" itemized deduction. Naturally, most taxpayers (and TurboTax) will choose the one that gives them the biggest tax break.
- What's my standard deduction for 2014?
- Can I itemize my deductions?
- How do switch from the standard deduction to the itemized deduction (or vice-versa)?
- Did I itemize last year?