Just tips:
Each taxpayer chooses each year between the standard deduction, an IRS flat amount, and itemizing current expenses such as mortgage interest, state taxes, and charitable contributions. Only determine if your deductible expenses exceed the standard deduction. Most people take the standard amount, but homeowners with high mortgage interest often come out ahead by listing, so do both calculations.
Most files never do. Tax software defaults to the standard deduction, and if you don’t enter your deductible expenses, there’s nothing to compare. People who would come out ahead by ranking get the lowest number without ever knowing it.
Comparison takes less effort than it sounds. Itemized deductions fall into four main buckets: mortgage interest, state and local taxes up to a federal limit, charitable donations and medical bills above a certain portion of your income. Add them. If the total exceeds the standard deduction for your submission status, the ranking wins.
Since the standard deduction nearly doubled in 2018, about 9 in 10 filers take it, according to IRS data. That still leaves millions who save by sorting and clustering into predictable groups: homeowners in the early mortgage years, when payments are mostly interest, and depositors in high-tax states, whose property and income taxes pile up quickly.
Before you file, gather three records: Your Form 1098 showing mortgage interest paid, your property tax bill, and receipts for any donations. Enter it all into your tax software even if you expect to receive the standard amount. The software compares the two totals and applies the higher one automatically, but it can only compare the numbers you give it. If you use a preparer, submit the same documents and ask to see both calculations.
If your detailed total is just short, see the aggregation. Concentrating two years of charitable giving into one can push that year out of line.
The math takes ten minutes once your documents are in hand. Make it the first step of your filing routine, not an afterthought.
Make and save more money, spend less time
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