This lesson will assist you in determining if a taxpayer should itemize deductions.
Itemized deductions are subtractions from a taxpayers' adjusted gross income (AGI) that reduce the amount of income that is taxed. Most taxpayers have a choice of taking a standard deduction or itemizing deductions. Taxpayers should use the type of deduction that results in the lowest tax. Generally, taxpayers should itemize deductions if their total allowable deductions are more than the standard deduction amount.
This lesson will teach you about standard and itemized deductions, including which expenses taxpayers can include in their itemized deductions. The lesson also explains how to calculate taxable income.
NOTE: In this lesson, you'll be asked to calculate answers for practice questions. You may want to have a calculator on hand for assistance.