Tax season is just about here again. That means millions of people are getting ready to gather up all their financial information for the year 2018 and file their returns. This year will be like no other, thanks to the Tax Cut and Jobs Act.
One of the biggest questions taxpayers have every year is whether or not they should itemize or just take the standard deduction. It used to be a major issue for many taxpayers. Itemizing is always more time-consuming, but often saves you money.
However, that question will likely be a lot easier to answer this year. The standard deduction has nearly doubled, meaning most taxpayers will not have enough itemized deductions to surpass the new standard deduction amounts.
If you’re still not sure, here are four things to consider. These can help you determine if it’s time to stop itemizing.
1. How much mortgage interest did you pay this year? If it wasn’t much then chances are you won’t surpass the standard deduction amount.
2. If you’re counting on a large deduction coming from your state and local income taxes, remember there is now cap of only $10,000.
3. How much did you donate to charitable causes? If you didn’t donate a lot, then chances are it won’t help your total enough to justify itemizing.
4. If your medical expenses were minimal this year, that’s another good sign that itemizing might not be worth it.