If Standard Deduction is greater than Claimed deduction, am I crazy?

Hello,





For 2006, I have both W2 and 1099-MISC income. My W2 income is the bulk of my income, with 1099-MISC totalling 13000.





Ok. I run the numbers through turbotax, I make Schedule C expense deductions: meals, equipment, supplies, communication, etc.





In the end, turbotax says 'Standard deduction' is higher than my claimed deductions. Does this mean I really don't even need to itemize my expenses? (because the standard deduction is greater anyway?)





am I screwing myself here and should I be more liberal with my expenses and itemizing?

If Standard Deduction is greater than Claimed deduction, am I crazy?
Somehow you are putting your Schedule C expenses on your Schedule A. You can take your equipment, supplies, communication business expenses on Schedule C, and you would still claim your standard deduction. That message regarding the standard deduction being higher than your claimed deductions means you are doing something wrong. The expenses should be entered as business expenses, and no matter how small they are they still reduce your 1099misc income if you report it on a schedule C.


Go back and try again. Start by putting the 1099 income on Schedule C, it will then ask regarding expenses for your business.
Reply:Schedule A is itemized deductions. These are real estate taxes ( or sales taxes ), mortgage interest, medical expenses and charitable deductions. If the total is less than your standards, then you take the standard deduction.





It is hard to get into itemized deductions without paying a mortgage.
Reply:Per TurboTax, the standard deduction is higher and itemizing is not necessary, because you would short change yourself. Many of the itemized expenses have limitations or threshhold floors that must be met. You say that you are deducting meals, equipment, supplies communcations things, Schedule C is for business expenses and does not affect itemized deductions or the standard deduction. Schedule A is where you list your itemized deductions.





Schedule A deducts medical expenses in excess of AGI, the taxes you paid throughout the year (state/local income taxes and property taxes), interest you paid (mortgage, most commonly), unreimbursed business expenses are limited to only 2% of the actual cost, etc.





I would not be more liberal with your expenses and itemizing, this year the IRS announced that they were going to dig deeper into the returns of people filing schedule C's. If there are audit adjustments that couldn't be negotiated away, the interest and penalties can be significant.





For my husband and myself, the standard deduction is also higher. I believe that unless there are children to increase some of the medical expenses among some other things, it may be difficult to surpass the standard deduction.
Reply:If your itemized deductions are less than the standard deduction, take the standard deduction. Otherwise, you will end up paying more in taxes. You basically get to choose option A or option B. You want to take the one that's the highest. And no, you not only do not need to itemize your expenses, you can't. You can only do one or the other.
Reply:Standard is usually higher than itemized unless you have substantial itemizations, and it's true (as stated above) that this usually only happens when you own a home and are paying a mortgage or had lots of medical expenses. Take a glimpse at Schedule A. If you don't see at least a couple of things that are going to put you over and above the Standard, don't waste your time and save your nerves.
Reply:You do a Sch C for you self-employment (1099) income/expenses and can still use the standard deduction rather than a Sch A (itemized deductions) if the standard deduction is higher than your itemized deductions. Do NOT be tempted to "inflate" your business expenses OR your personal itemized deductions. That is CHEATING %26amp; the IRS will eat your lunch if/when you get caught. I PROMISE you do NOT want them after you. They have virtually unlimited power to make your life hell.





Btw, I would encourage you to go to a CPA (NOT H%26amp;R Blockheads). IMO, TurboTax stinks. I have had to fix so many TurboTax returns that I can't even believe they are allowed to sell it.
Reply:me agree with irongram answer





deductions for schedule c have nothing to do with itemized deductions, that comes from schedule a





you not crazy, doing tax just make you think you are

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