Tax Deduction Consulting: Standard Federal Deductions Brigham City UT
Salt Lake City, UT
Education: BSc (Math)MBA
Years of Experience: 16
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SALT LAKE CITY, UT
West Valley, UT
St George, UT
Salt Lake City, UT
Exit Strategy Specialists, LLC
Years of Experience: 26
IARFC, MDRT, FPA
Invoice, Estate Planning, Business Planning, Portfolio Management, Trustee Service, Pension Planning, Executive Compensation Planning, personal Coach, Retirement Planning, Tax Planning, Seminars Work, Employee Benefits, Stocks and Bonds, Mutual Funds, Mortgage Loans, Annuities, Life Insurance, Disability Income Insurance, Long Term Care Insurance, Medical Insurance, Group Insurance, Business Coach, Charitable Planning, Education Plan, Asset Protection, BuySell, Compensation Plans
Tax Deduction Consulting: Standard Federal Deductions
Standard Deduction for Federal Taxes
Millions of tax payers use the standard deduction for their Federal Taxes each year. Is this the best choice for them?
The idea of deductions is to reduce your taxable income. The less taxable income that you have, the less your tax. The IRS knows that everyone is going to have some deductions. There are just too many of them and it is a rare person who does not have quite a few given the complex tax code. The idea of the standard deduction is really to make things a little less complicated and encourage people to take the easy way out of tax return preparation. When you select the standard deduction, you do not have to itemize your deductions.
This means that you do not have to save piles of receipts, nor do you have to worry about the validity of your deductions or fear having them questioned by an IRS audit. All you have to do is enter the standard deduction amount on your tax return and calculate your tax. The standard deduction changes every year. For the 2009 tax year, the amount is $5700 for a single tax payer or a married tax payer filing separately. The standard deduction is $8350 for Head of Household filers, and $11,400 for married filing jointly.
So, the standard deduction for Federal Taxes makes it a lot easier to fill out your tax return and saves all kinds of time and trouble in record keeping during the year. What it also does, most likely, is to insure that you pay more taxes to the Federal Government than you actually owe! It is almost as if the IRS has concluded that the majority of tax payers will look for the easy way out even if it means paying more.
The thing to do is prepare yourself to itemize your taxes and compare your result at the end of the year with the standard deduction. If your deductions exceed the standard deduction, you should itemize. If they do not, you can still go ahead and claim the standard deduction. Your choice in any given year does not lock you into a lifelong c...