So a little about me. I’m 34, a dermatology resident, making approx 40k. I’m divorced and I spend $1100/month on child support and child care. I rent and have no property. I occasionally spend money on items related to my job (about $500-1000 per annum).
Can someone estimate how much I’d save on taxes by itemizing? And what are the basics of itemizing so I can do it myself?
What will you save? Nothing. This assumes that you are talking about U.S. taxes, of course.
The standard deduction for 2002 (sorry, I do not have my 2003 book yet) was $4,700 (single). The only item you listed would be the job related items. The $500-$1,000 annual amount is subject to a 2% AGI floor. That means that you reduce those expenses by 2% of your adjusted gross income (line 35 on the form 1040).
The child support is deducted from Gross Income to come to Adjust Gross Income. (In other words, not an itemized item.)
The “typical” things people will itemize for are:
1) Home loan interest
2) Charitable contributions
3) Major medical expenses not covered by insurance(subject to a 7.5% AGI floor!)
If your itemizations are not greater than the standard deduction, it does not make sense to itemize.
For more information, take a look at the instructions for Schedule A on their web site.
Don’t forget taxes (other than your Federal income tax, of course), principally real estate taxes and state income taxes. But in choosybeggar’s case, he’s not paying any real estate taxes (that can be a biggie for a lot of homeowners), and his state income taxes couldn’t possibly be high enough to push his total deductions higher than the standard deduction. So, the “nothing” answer is still correct!
Call the IRS and give them your scenarios and they will help you. As crazy as it sounds hundreds of pepole do this every day. You have questions, ask the people who live the book every day. The average IRS phone help person has zero agenda as to how much money the govt brings in and they can confirm any instructions or qualifications for deductions in writing in case there is a question later…
Drach, Son of an IRS phone help unit manager.