Is it worth the risk to itemize deductions?
DEAR HARRY: I just finished working on our tax returns, and I found a little problem in reviewing the 1040. The return as I prepared it has $12,100 of itemized deductions, mostly charity but also taxes and medical costs. The standard deduction for us is $
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EAR HARRY:
I just finished working on our tax returns, and I found a little problem in reviewing the 1040. The return as I prepared it has $12,100 of itemized deductions, mostly charity but also taxes and medical costs. The standard deduction for us is $11,900. The difference is just about $200. If I take the standard deduction, my taxes will go up by just about $50. If I itemize, there is a greater chance that the IRS will come after me to examine some of those items than if I take the standard deduction. My question to you is: Is it worth the cost of $50 for this partial "insurance" against an audit?
WHAT HARRY SAYS: Different people will have different opinions on this. Are there any large items in those deductions that are questionable, such as cosmetic surgery? If you're confident that every item is legitimate, why not save the $50? You also have to consider the IRS view. Is it worth it to go after a taxpayer for $50 and incur more than that in costs? Not very likely. So, unless you'll have sleepless nights, I recommend the itemized deductions. But if you do get called in, don't come after me with drawn sword; bullets are quicker.