Review your Tax Stance: Standard Deduction or Itemized Deduction

Last updated on April 8, 2023

You have been using the standard deduction or itemized deduction for years, why would you consider opting for the other? The reason is change. With time, your financial situation changes as do certain circumstances in your life that affect taxes. If you have been using the standard deduction for years and now you are making big donations to charity or have moved to a state with high local taxes, you might want to consider itemizing your deductions.

Whenever there is a big change in your life or in the lives of your spouse and/or children, it is a good idea to see how it impacts your taxes. In most cases, it would either increase or decrease your tax bill. For example, getting married may increase your other bills, but it can potentially lighten your tax bill if you file jointly.

It can also be beneficial to check if any big expenditures you make are eligible for tax deductions. For instance, those who have taken a loan for a home and are paying interest on it can deduct the interest if they itemize. If you are able to deduct the expense, you may itemize for that year.

You are free to use either the standard deduction or itemized deductions for any year. If you use the standard deduction for this year, you can always choose to itemize deductions next year.