Question

Joseph's standard deduction for filing single is $5,800 for 2011. However, he paid $6,200 in mortgage interest and contributed $1,100 to charity. Should Joseph itemize or take his standard deduction?

A) Joseph should itemize.
B) Joseph should take the standard deduction.
C) Joseph should consult a tax professional.
D) Joseph should do both itemize and take the standard deduction.

Answer 1

Joseph should itemize his deductions since his total deductions of $7,300 exceed the standard deduction amount for a single filer, which is $5,800. Thus (option a) is right answer.

Step-by-step explanation:

If Joseph's standard deduction for filing single is $5,800 for 2011, but he paid $6,200 in mortgage interest and contributed $1,100 to charity, the total of his itemizable deductions would be $6,200 + $1,100 = $7,300.

Since his itemizable deductions exceed the standard deduction of $5,800, Joseph should itemize his deductions when he files his tax return.

It is more beneficial for him because he would lower his taxable income by a greater amount than if he took the standard deduction.

Thus (option a) is right answer.