Comparing Standard and Itemized Deductions: Which is Right for You?

What’s the best way to choose a tax form? Naturally, it’s the one that saves me the most money. But figuring out which one that is often depends on deductions.

As a young couple, my spouse and I face a key question: Should we go with the standard deduction of $11,600 for joint filers, or should we try itemizing our deductions? The standard deduction seems simple, but itemizing sounds complicated, and we’re not sure if our itemized deductions would even exceed the standard amount. Honestly, they might end up being less.

So, what falls under itemized deductions? The list includes:

– Medical expenses
– State income taxes
– Property taxes
– Home mortgage interest
– Charitable contributions
– Casualty and theft losses
– Job expenses
– Miscellaneous deductions

We can’t consider property taxes, mortgage interest, or casualty and theft losses, so we’re left with:

Medical expenses: We’ve set aside $700 in our Flexible Health Spending Account (FSA), which is tax-deductible. Besides that, there’s not much else. In 2012, I contributed $5,000 to our FSA for Lasik eye surgery. The surgery was exciting, but it took about $500 off my monthly income, which wasn’t great.

State income taxes: According to my last paycheck, I’ve paid over $2,200 in state income taxes. I’m not sure about my spouse’s contributions since I don’t have his pay stubs, but considering he was unemployed for five months, I doubt they’re significant.

Charitable contributions: We haven’t been doing too well on this front. We used to donate regularly to our church, but stopped when my husband lost his job. I’m hopeful we can restart this year.

Job expenses: This category is tricky, with lots of specific requirements, including job-hunting costs. My husband’s academy, plus his trips for job tests and interviews in Seattle, Arizona, Nevada, and Northern California, could count. We spent around $5,500, but without all the receipts, I’m not sure of the exact amount. I doubt we kept them all.

When we compare the standard deduction and itemized deductions, our itemized total is around $8,400, which is less than the $11,600 standard deduction. Plus, filing the longer tax form for itemizing costs more than the shorter one for the standard deduction, adding a few hundred dollars. So it’s important that our itemized deductions are high enough to make this extra cost worthwhile.

My tax knowledge is limited to what I’ve read online, so how do you decide which tax form is best for you? Do you prefer itemizing deductions or sticking with the standard deduction?