To simplify this question, first, you need to know what is the standard deduction for your situation?
The 2022 Standard Deduction for Single or Married filing separately is $12,950, for Married filing jointly or
Qualifying surviving spouse is $25,900, and Head of household is $19,400. If your itemized deductions
are higher than the Standard Deduction, then you should fill out form Schedule A.
This will reduce the amount of money you will have to pay taxes on. What are itemized deductions you ask? Some examples are medical and dental expenses that you paid out of pocket (you weren’t reimbursed, or insurance
didn’t pay for), state and local taxes, real estate taxes, property taxes, mortgage interest, gifts, casualty,
and theft losses from a federally declared disaster.
Some have limits on the amount that can be deducted, but if you have more to itemize than the Standard Deduction limit, then you should definitely go the itemized route. If you know you don’t have enough to itemize, then go the Standard Deduction route.
Tax professionals will ask you questions to help you decide which deduction route will assist in you paying less taxes or give you the biggest refund.
If you are looking for someone to do your bookkeeping and/or accounting for your business or even to manage your supplemental income data (such as rental property income/expenses), please contact me to set up a consultation to see what the best fit will be for your business to keep your books in proper working order.
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