April 18 will be here before you know it. Have you done all you can to minimize your tax payments and maximize prudent financial planning? If you’re not sure, there’s still time to make a few smart choices before you file this year’s tax return.
Reconsider the standard deduction
Many people automatically take the standard deduction on their return either because it simplifies the task of filing or they’re uncertain about the deductions for which they may qualify. For the 2015 tax year, the standard deduction is $6,200 for single people and $12,400 for married couples filing jointly. But did you know that you may actually be eligible for a much larger deduction if you itemize instead of taking the standard deduction? In fact, the U.S. Government Accountability Office found that in 2002 as many as 2.2 million taxpayers likely overpaid their taxes by about $1 billion because they failed to itemize deductions. Common deductions include home mortgage interest, real estate taxes, state and local income or sales taxes, charitable donations, losses due to casualties or thefts, and unreimbursed medical or employee business expenses. Depending on which ones apply to you, they could add up to more than the standard deduction, so it’s worth considering itemizing.