Tax Tips: Reduce taxes by itemizing

Taxpayers pay income tax on their income, less certain deductions. One choice is between the "standard deduction" and "itemized deduction," and taxpayers are allowed to use whichever number is higher. Many taxpayers use the standard deduction because it is easy. It is a flat amount determined by the IRS and no documentation is required to be able to use it.

The itemized deduction is an accumulation of certain expense items, and the taxpayer must have documentation of these expenses and must report those amounts to the IRS. The most common items included in the itemized deduction total are mortgage interest, property taxes, state income taxes, charitable contributions, and medical expenses.

It makes sense to take advantage of the itemized deduction if it benefits you. It is usually only beneficial if a taxpayer owns a home with a mortgage, but other taxpayers may also use it if they choose. It pays to check the IRS rules and see if you're better off claiming the itemized deduction, because it might save you a lot of money.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Filing an Income Tax Extension

If you aren't able to complete your federal tax return by the April deadline, find out how and when to file for an IRS extension with these tips from TurboTax.

Read More

Brought to you by TurboTax.com

What is a CPA (Certified Public Accountant)?

A CPA (Certified Public Accountant) is an accounting professional licensed and credentialed by a state or territory to offer accounting services, including tax preparation, to the public.

Read More

Brought to you by TurboTax.com

How to File an Amended Return with the IRS

If you've made an error on a tax return you already filed or simply come across new information, such as a tax deduction or credit you now realize you qualify for, file an amended tax return to make the correction. The Internal Revenue Service (IRS) knows the tax code is complex, and that people make mistakes. The process for filing an amendment is straightforward. Simply file Form 1040X, Amended Tax Return, along with the corrected or additional documents you did not originally file with your return.

Read More

Brought to you by TurboTax.com

2018 Tax Reform Impact: What You Should Know

Congress has passed the largest piece of tax reform legislation in more than three decades. The bill went into place on January 1, 2018, which means that it will affect the taxes of most taxpayers for the 2018 tax year.

Read More

Brought to you by TurboTax.com
Read Full Story
Your resource on tax filing
Tax season is here! Check out the Tax Center on AOL Finance for all the tips and tools you need to maximize your return.

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.