What is the difference between standard and itemized deductions?

Standard deductions are a set amount of deductions for which taxpayers may qualify. In Arizona, the amount of the standard deduction is based on filing status and income. For example, in 2020, single taxpayers with an income of less than $73,400 can take a standard deduction of $12,200. Itemized deductions, on the other hand, are deductions that taxpayers can itemize to reduce their taxable income. These deductions can include medical expenses, mortgage interest, charitable contributions, and other expenses that are allowed by the IRS. Depending on the amount of itemized deductions, they may be more beneficial than the standard deduction. In Arizona, taxpayers may choose which deduction to take each year – the standard deductible or itemized deductions. The advantage of itemizing deductions is that it may result in a bigger tax benefit than the standard deduction. However, it requires taxpayers to have receipts and documentation to prove their deductions. Therefore, if taxpayers are not able to itemize deductions, taking the standard deduction may be the better option.

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What is the difference between standard and itemized deductions?

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