What is the difference between standard and itemized deductions?

Standard deductions are the amount of money a taxpayer is able to deduct from their taxable income without having to list and document individual expenses. This amount will vary from year to year and is based on the taxpayer’s filing status. In Virginia, the standard deduction for the 2019 tax year was $3,000. On the other hand, itemized deductions are a list of expenses written down to reduce the amount of taxable income. Instead of taking the standard deduction, a taxpayer can opt to list and document expenses like mortgage interest, student loan interest, charitable donations, medical expenses, and more, in order to deduct that amount from their taxable income. This amount can be higher than the standard deduction, depending on the taxpayer’s financial situation. It is important to note that a taxpayer can normally only pick one or the other option. Whichever option will save you the most money should be the one chosen. For example, if your itemized deductions total $4,000 (compared to the standard deduction of $3,000) then it would make more sense to itemize. However, if your itemized deductions total only $2,000 then it would be better to take the standard deduction. It is important to keep track of your deductions and make sure you choose the option that will benefit you the most. Standard deductions are an easy way to reduce your taxable income, but itemized deductions can provide the largest reduction for taxpayers who qualify.

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What is the difference between standard and itemized deductions?

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