Why Standard Deductions Will Fit Most Clients

Itemizing deductions will make the client ineligible for the standard deduction. There are also certain taxpayers who are not eligible:

• A married individual filing as married filing separately whose spouse itemizes deductions.
• An individual who was a nonresident alien or dual status alien during the year (see below for certain exceptions).
• An individual who files a return for a period of less than 12 months due to a change in his or her annual accounting period.
• An estate or trust, common trust fund, or partnership.

However, certain individuals who were nonresident aliens or dual status aliens during the year may take the standard deduction in the following cases:

A nonresident alien who is married to a U.S. citizen or resident alien at the end of the tax year and makes a joint election with his or her spouse to be treated as a U.S. resident for the entire tax year. A nonresident alien at the beginning of the tax year who is a U.S. citizen or resident by the end of the tax year, is married to a U.S. citizen or resident at the end of such tax year and makes a joint election with his or her spouse to be treated as a U.S. resident for the entire tax year.

Clients should itemize deductions if their allowable itemized deductions are greater than their standard deduction, or if they must itemize deductions because they can't use the standard deduction.

One way to decrease a client's taxes is by itemizing deductions on Schedule A (Form 1040), Itemized Deductions. Itemized deductions include amounts paid for state and local income or sales taxes, real estate taxes, individual property taxes, mortgage interest and disaster losses. Also included are gifts to charity and part of the amount paid for medical and dental expenses.

Itemizing can help if clients:

• Can't use the standard deduction or the amount that can be claimed is limited.
• Have large unreimbursed medical and dental expenses.
• Paid mortgage interest or real property taxes on their home.
•  Had large "Other Itemized Deductions" (line 16 on Schedule A (Form 1040).
• Had substantial unreimbursed casualty or theft losses from a federally declared disaster.
• Made large contributions to qualified charities.

Clients are often faced with complex issue surrounding taxes and will appreciate useful and sound guidance from their advisors or other qualified parties.

Of course, getting customized legal and tax advice is important. You and your clients should consult your own attorneys, or other legal or tax counsel, for advice on specific legal and tax matters.

Vincent Cucuzza, CFP, ChFC, is a financial planner with Barnum Financial Group. He is also a registered representative of and offers securities and investment advisory services through MML Investors Services.

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