When you’re filing taxes in Springfield, IL, one of the first decisions you must make is whether to accept the standard deduction or itemize. Your tax preparer can help you determine which will offer you the most benefits. At JLW Tax & Bookkeeping Services, our tax preparation services include a quick comparison between standard and itemized deductions, and we have more than 30 years of experience helping with financial planning and accounting to help make sure we get it right the first time.
How Much is the Standard Deduction
The standard deduction for 2022 tax filers is $12,950 for single filers, $19,400 for those filing as head of household, and $25,900 for married couples filing jointly. Depending on filing status, seniors may be eligible for an add-on to the standard deduction ranging from $1,400-$1,750.
The standard deduction is often the best option for those filing taxes on part-time income or for those without other deductions that would reduce their tax liability. When you don’t own a home, operate a business, have children, or have investment income, the standard deduction is often easier and more affordable to maximize your refund.
This information only applies to your federal return. If you have questions about state taxes and need a tax preparer, contact our team at JLW Tax & Bookkeeping Services for more information.
When Should You Use Itemized Deductions
Itemized deductions are best for those who don’t qualify for the standard deduction or who have more in deductions than the standard amount. You won’t qualify for the standard deduction if you’re part of a married couple who file separately and your spouse itemized their deductions. If you were a nonresident alien during the tax year, you also don’t qualify for the standard deduction. To qualify, you must file for an entire year, so if you change your accounting period mid-year, you’ll need to itemize that year. Springfield, IL, does offer a personal exemption amount each year that works similarly to a standardized deduction, but there is no option to itemize.
Maximizing Your Refund When Filing Taxes
If you’re unsure which filing type makes the most sense, take a few minutes to add up all of your itemized deductions to check the total. If the total amount is larger than the standard deduction for the year, itemize. If not, file with the standard. At JLW Tax & Bookkeeping, we can help you decide which method works best for your financial situation and help you plan for the next year.
Business vs. Personal Accounting
If you operate a business, making these decisions can be more complicated, particularly if you’re a sole proprietorship without a separate business entity. Your bookkeeping must be fairly detailed to give you access to deductions like those for home office space. If you need help with your bookkeeping or payroll management in Springfield, IL, call us today at 217.679.1872. JLW Tax & Bookkeeping Services is here to help max tax season easier for all our clients.