MIME-Version: 1.0 Content-Location: file:///C:/2E8833A5/ShouldYouItemize.htm Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii" Should You Itemize

Should You Itemize?

Generally, you must decide whether to itemize deductions or to use the standard deduct= ion. You should itemize deductions i= f your allowable itemized deductions are more than your standard deduction. Some taxpayers must itemize deductions because they do not qualify for the standard deduction.

Those taxpayers not eligible to use the standard deduction include nonresident aliens, dual-status aliens, and individuals who file returns for periods of less than 12 months. When a mar= ried couple files separate returns and one spouse itemizes deductions, the other spouse MUST also itemize deductions.

Itemized deductions are certain expenses that you can use to lower your taxes. For 2006, the categories of itemized deductions are:

  1. Medical and dental expenses,
  2. State and local income taxes,
  3. Real estate and personal property taxes= ,
  4. Home mortgage and investment interest, =
  5. Charitable contributions,
  6. Casualty and theft losses, <= /span>
  7. Job expenses, and
  8. Miscellaneous deductions.

You may be subject to a limit on some of your itemized deductions. For 2006, th= is limit applies if your adjusted gross income is more than $150,500, or $75,2= 50 if you are married filing separately. This limit applies to all itemized deductions except medical and dental expenses, casualty and theft losses, gambling losses, and investment interest.

The standard deduction varies according to your filing status and age. The basic standard deductions for 2006 are as follows: Single $5,150;  Head of Household $7,550;  Married, filing a joint return $10= ,300; Married, filing a separate return $5,150; Qualifying Widow or Widower with dependent child $10,300

An additional amount will be allowed if you or your spouse became age 65 or ol= der before January 2, 2007, or if either of you is blind. If you can be claimed= as a dependent on another person's return, your standard deduction may be limi= ted.