Tax Income

The standard deduction is a fixed dollar amount that reduces the amount of income subject to tax. The specific amount depends on your filing status, age, and whether you are visually impaired.

- Easy to claim; no need to track expenses.
- Automatically maximizes deductions for many taxpayers.
- Reduces filing complexity.

- May not maximize savings for taxpayers with high deductible expenses.
- Does not account for specific circumstances like large medical bills.

- Taxpayers with straightforward financial situations.
- Individuals who do not have significant deductible expenses.

Itemized deductions allow taxpayers to list specific expenses such as mortgage interest, state and local taxes, medical expenses, and charitable contributions to reduce taxable income.

- May provide higher deductions for taxpayers with significant eligible expenses.
- Allows customization based on individual financial circumstances.

- Requires detailed record-keeping.
- Can be time-consuming and complex.
- Only advantageous if itemized deductions exceed the standard deduction.

- Taxpayers with high deductible expenses.
- Individuals with significant mortgage interest, medical bills, or charitable contributions.