To itemize or not to itemize - that is the question

Ok, I'm not a poet. But someone asked me about itemizing deductions this week and I couldn't resist the title. So, should you itemize your deductions on your taxes? As always, the easy answer is "it depends."

For couples who file jointly, are under 65 and are not blind, the standard deduction is $11,400. That means you have to have deductions higher than $11,400 to make itemizing worthwhile. What can be itemized? Mortgage interest, state and local taxes (income tax or sales tax - but not both), real estate taxes, taxes on a new motor vehicle and gifts to charity are fully deductible. If these total up (or come close to) your standard deduction, then itemization makes good sense. In SC, taxes aren't high enough to force the issue alone, so mortgage interest and charitable giving usually are the factors that answer the question.

There are other deductions too. Medical and dental expenses that exceed 7.5% of your adjusted gross income is deductible. That sounds hard, but start by taking a look at your income and multiply by .075. If your medical expenses are more than that, proceed, if not, just let them go.

Years ago, someone told me you could deduct shoe polish. The logic was you polished your shoes for work, so it was a job expense. While I would question shoe polish under any circumstance, job expenses have to exceed 2% of your adjusted gross income. Most people that have a job that requires polished shoes have a high income and shoe polish won't come up to that much money.

By all means you should do the math every year to see if itemization helps you. Some people worry about being audited. My advise follows Will Rogers' saying "I'm happy to be an American and happy to pay my taxes. But I could be a lot happier for a lot less money." In other words, don't worry about being audited, do what's right, document your numbers and take every deduction that is legally allowed.

So what do you think? Will you itemize this year?