When Does it Make Sense to Itemize Your Taxes?

Around tax time, many taxpayers struggle with whether it makes sense to itemize. The answer is almost always purely financial. In most cases, you will opt to itemize deductions if the total of those deductions is larger than your standard deduction.



For the tax year 2010, the standard deduction is $5,700 for single taxpayers or for those married filing separately; $11,400 for married taxpayers or qualifying widow(er)s; and $8,400 for heads of household. If the total of your itemized deductions is greater than the deduction for your filing status, then it usually makes sense to itemize (some exceptions apply, so keep reading).

Use Schedule A on a federal form 1040 to figure your itemized deductions. It's important to note that you cannot use a form 1040-EZ or a form 1040A; you can read more about forms in the 1040 series here.