Question

Total itemized deductions must be ____ to reduce your tax liability.

Answer 1

Total itemized deductions must be “greater than the standard deduction” in order to reduce the tax liability.

Itemized deductions are the personal expenditures which can be deducted from the adjusted gross income (AGI) when the taxable income is determined.

Standard deduction is a blanket deduction which depends on the tax-payer’s age, filing status and other factors. It is taken by a taxpayer whose itemized deductions are comparatively small.

To avoid the itemizing deductions, an individual can chose to take the standard deduction, which is a flat amount.