Taxpayers can either take a standard deduction or itemize their deductions to reduce the taxable income on their federal income tax return. The most common itemized deductions are those for state and local taxes, mortgage interest, charitable contributions, and medical and dental expenses.

Is it better to itemize or use standard deduction?

If the value of expenses that you can deduct is more than the standard deduction (in 2020 these are: $12,400 for single and married filing separately, $24,800 for married filing jointly, and $18,650 for heads of households) then you should consider itemizing. Itemizing requires you to keep receipts throughout the year.

Who can deduct car expenses on your tax return?

Here’s the 411 on who can deduct car expenses on their tax returns 1 Business owners and self-employed individuals. Individuals who own a business or are self-employed and use their vehicle… 2 Employees. Employees who use their car for work can no longer take an employee business expense deduction as part of… More …

Are there any tax deductions for prepaid expenses?

The IRS concluded this prepayment was not deductible for income tax purposes because it failed the 12-month rule. Although the IRS concluded that the prepaid FDIC assessments were not deductible when paid, there are certain prepaid expenses that may be deductible to most financial institutions.

Are there any deductions you can deduct on SARS?

(Part 2)”. Hi Petro, They most certainly are deductible. Just keep in mind that SARS allows deductions against “taxable income” and given the fact that your salary is currently below a taxable bracket, your deductions will be ring-fenced and not allowed as a deduction in this year of assessment.

What kind of expenses can you deduct on taxes?

These items most commonly include taxes, licensing fees, insurance contracts and warranty contracts.