, Answering FAQ'sTurboTax Employee
When preparing your taxes, you choose to reduce your taxable income by using either Standard or Itemized Deductions.
Taxpayers with medical, dental, tax, interest, charity, theft/loss, job-related, and certain other allowed expenses may save money by itemizing deductions. The ability to deduct home mortgage interest and property taxes is a common situation making a Schedule A worthwhile.
However, most taxpayers with few or no expenses take the standard deduction when preparing their returns. The standard deduction is taken on Form 1040.
If you choose to itemize deductions, you'll report your them on a Schedule A, Itemized Deductions, which is added to your Form 1040. The ability to itemize deductions with a Schedule A is available in TurboTax Deluxe, Premier, and Home & Business versions.
Normally, you'll want to be sure your itemized deductions exceed the standard deduction for the best refund or reduction of any tax due. If you are not sure about which one to use, enter all of the itemized deductions you have and TurboTax will show you which one is better for you.
Standard Deduction: The standard deduction is a dollar amount that reduces the amount of your taxable income. Your standard deduction depends on your filing status, and can be increased due to age or blindness. Your standard deduction might also increase if you live in a federally declared disaster area.
For 2014, the standard deductions are (Note, these amounts are increased if you are over age 65 or blind):
- Single or married filing separately - $6,200
- Married filing jointly - $12,400
- Head of household - $9,100
Itemized Deductions: When you itemize, you do not get the standard decuction. Instead, you are able to claim certain of your expenses as deductions. Expenses you could deduct include mortgage interest, state income taxes or sales tax (but not both), real estate and personal property tax, and charitable donations. Additionally, you may be able to deduct large medical and dental expenses not covered by insurance, and large losses due to theft or casualty. The Guide Me interview in TurboTax will step you through the deduction topics that could benefit you.
Start by selecting Federal Taxes (or Personal in the Home & Business edition), then select Deductions & Credits.
In the next screen, choose whether you'd prefer to:
- Walk me through everything – this guides you through the deduction categories (recommended, as you'll see all the possibilities for deductions), or
- I'll choose what I work on – you can choose from a list of specific topics for you to work on.
TurboTax shows you all of the areas you can enter deductions, and then recommends either the standard or itemized deduction for your tax return.
- Medical Expense Deductions
- Should I Deduct Sales Taxes or State Income Taxes?
- Deducting Your Real Estate (Property) Taxes
- What's the difference between "property tax" and "personal property tax"?
- Mortgage Interest Deduction
- Mortgage Insurance Deduction
- What Kinds of Charitable Donations Can I Deduct?
- Casualty and Theft Losses
- Can I Deduct My Employee Business Expenses on My Tax Return?