But how do I decide which tax form will give me the most money? Apparently, it all comes down to deductions. As a young married couple of two, do we file the standard deduction of $11,600 for a married couple filing jointly? Or do we itemize our deductions?
The standard deduction is the easiest choice. The idea of itemizing our deductions seems time consuming and I am not even sure that our itemized list would be more than the standard deduction. In fact, it may even be less.
So what would qualify under itemized deductions?
The list of itemized deductions includes:
- Medical expenses
- State income taxes
- Property Taxes
- Home Mortgage interest
- Charitable contributions
- Casualty and theft losses
- Job Expenses
- Misc deductions
My husband and I don’t qualify for Property Taxes, Mortgage interest or casualty and theft losses, leaving us with:
We put $700 into our Flexible Health Spending Account (FSA), which is tax-deductible. But that’s about it. This year (2012), I contributed $5,000 toward our FSA account so I could get Lasik Eye Surgery. I’m excited about the surgery, but not happy that it’s taking away almost $500 a month (including health insurance) from my take-home pay.
State Income Taxes
According to my last paycheck, I have contributed over $2,200 in state income taxes. I don’t have any of my husband’s pay stubs so I don’t know how much we could add from him. Considering he didn’t work for five out of the 12 months, I don’t think it would be very much.
Our charitable contributions are pitiful. At one point, we were making a monthly contribution to our church, but that went down the wayside when Eric stopped working. I really hope to pick this up again this year.
This is a toughie. There are a lot of requirements for this one, including job search expenses. Eric’s academy would count, including all his travel arrangements to Seattle, Arizona, Nevada, and northern California for job tests and interviews for fire departments. Between Eric’s travel and school, we spent about $5,500 but I don’t have exact numbers unless we pull out all the receipts. And to be fair, I’m not sure we even have all the receipts.
So right now, with itemized deductions, we’re looking at$8,400 vs. the $11,600 standard deduction.
Then you also have to look at the cost of filing the long tax form (itemized deductions) vs. the short tax form (standard deduction only). It costs an extra few hundred dollars to fill out the longer tax form, so you want to make sure the overall worth of your itemized deductions will cover the extra expense.
I know very, very little about taxes and everything I know is from what the internet has taught me.
How do you decide which tax form to file? Do you itemize deductions or take the standard deduction?
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