Do I benefit from itemizing or should I take the standard deduction?

When preparing your federal tax return, you have the option of either taking the standard deduction, or itemizing if you think you may have more qualified expenses than the standard deduction provides.

The amount of the standard deduction depends on your filing status. For the 2012 tax year, the standard deduction is:

Single or Married Filing Separately $5,950

Married Filing Jointly or Qualifying Widow(er) $11,900

Head of Household $8,700

The standard deduction is higher for individuals who are 65 or older or who are blind. If you are eligible and choose to file using the standard deduction, based on your filing status, one of the amounts above will be deducted from your income before the amount of tax you owe is calculated.

However, if you have expenses that add up to more than the standard deduction allows, or you are not eligible to use the standard deduction, you may want to itemize your deductions. When itemizing your deductions you can add up your qualifying expenses, such as home mortgage interest, out-of-pocket medical and dental expenses, state and local taxes, real estate taxes, charitable contributions and others.

Read more about itemizing here and online at Publication 501, Exemptions, Standard Deduction and Filing Information Publication 17, Your Federal Income Tax (For Individuals) –English and Spanish