In this video, I discuss the choice between itemized and standard deductions as covered on the CPA exam.
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he choice between taking the standard deduction and itemizing deductions on a U.S. tax return depends on individual financial circumstances. Here's a brief comparison:

1. Standard Deduction:

Simplicity: It's a flat amount provided by the IRS that you can deduct from your income, making it simpler to calculate.
Amount: As of my last update in April 2023, the standard deduction amounts vary based on filing status (e.g., single, married filing jointly).
Beneficial for: Taxpayers with deductions that do not exceed the standard deduction amount.
2. Itemized Deductions:

Complexity: Requires more detailed record-keeping and calculations. You list eligible expenses and add them up.
Types of Deductions: Can include mortgage interest, state and local taxes (SALT), charitable contributions, medical expenses exceeding a certain percentage of income, and more.
Beneficial for: Taxpayers with significant deductible expenses that exceed the standard deduction amount.
Choosing Between the Two:

Comparison: Calculate your total itemized deductions and compare with the standard deduction amount. Choose the one that gives you a higher deduction.
Tax Software: Many tax software programs can help you calculate both and choose the more beneficial option.
Change in Circumstances: Your choice might change from year to year based on changes in income, expenses, or tax laws.

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