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Video: What Are Itemized Tax Deductions?

Updated for Tax Year 2015


OVERVIEW

Itemized tax deductions can help save you even more money during tax season if your deductions exceed the standard amount. Learn about itemizing your tax deductions with help from TurboTax in this video on annual tax filing.


Video transcript:

Hello, I'm Jeremy from TurboTax with important news on how you can reduce your tax bill by itemizing your tax deductions.

When you sit down to complete your tax return, one of the first things you need to evaluate is whether you are eligible to itemize your deductions. By itemizing, you can claim a larger tax deduction and save more on your taxes. The tax law gives you two options.

You can claim the standard deduction amount for the year or you can itemize your tax deductions. However, you will only want to itemize when your total deductible expenses for the year exceed the standard tax deduction. Making this comparison will require you to be familiar with the types of expenses you can deduct.

Although there are a wide range of deductible expenses, common tax deductions include mortgage interests, state and local property and income taxes, medical expenses and charitable contributions. Before making the decision, total these up and compare it with the standard tax deduction. If you use TurboTax, we will do this for you and recommend the path that gives you the greatest tax savings.

If you decide to itemize, you must list these expenses in their appropriate categories on a Schedule A attachment to your personal income tax return. One drawback to itemizing is that you cannot file on forms 1040EZ and 1040A. Again, TurboTax makes it easy by asking simple questions and filling in all the right tax forms for you.

Although in most cases itemizing tax deductions will benefit you, you should be aware that if you are subject to the alternative minimum tax, many of your deductions will be reduced or even eliminated. For more information about this and other tax topics, visit TurboTax.com.

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The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.


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