Spend Less Save More: Itemize or not to itemize?
By spendlesssavemore on March 19, 2013
Itemize or not to itemize? Well, itemization is time consuming as someone who has to do the books for our home repair business it is time consuming, but necessary. However if you follow the tips given in the organize in thirty days blog series done this year you should really have no problem. Simply gather your receipts each day in a basket in a central location, every receipt wither you believe it is for tax reasons or not. At the end of each month go over each receipt and categorize it into bills paid, personal purchases, tax deduction, and account statements including bank statement for interest purposes.
Then simply list them and total income and expenses on a log then you file away all needed receipts this will allow you to simply gab and total each sheet when tax time comes around so that you simply plug in your numbers into your forms and your taxes are complete. Now you still need to consider what you can and cannot itemize, asking your CPA or going to www.irs.gov and search “Schedule A” to find out what you qualify for. Although filling a 1040EZ tax for is simple if you choose to itemize you can deduct more than the standard. Some typical deductions are mortgage interest, charitable donations, unreimbursed work expenses, real estate taxes, health care premiums, college tuition, books etc. If you are self employed itemization is truly the only way to go you can deduct work related expenses advertising, office supplies- computers, printer, phones, etc. gas or mileage not both if you choose mileage keep close account of your beginning mileage and ending if you have one vehicle you use for transportation. Keep in mind however that the IRS sees large deductions as red flags and can begin audits so use a reportable CPA or a service that offers audit support. For more tips and savings visit www.where2save.com
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