The IRS gives each of us a standard deduction for Federal Income Tax purposes. According to the IRS Website, the standard deduction is a dollar amount which reduces the income in which you are taxed. This amount is adjusted for inflation and also increases at certain age levels.
This deduction is certainly generous from and IRS standpoint, and acts as a floor for many of your deductions. (The ultimate result of this deduction is a simplification of many tax returns for the IRS as a great number of returns only qualify for the standard deduction.)
If you are only qualifying for the standard deductions, here is a strategy for possibly maximizing your deductions every other year.
Clump your deductions: (Primarily your property taxes)
Once your mortgage is paid off, many times a tax payers biggest deduction, we have found individuals personal deductions often fall just under the floor of the standard deduction. A clever technique to maximize your deductions in alternating years, is to pay (“clump”) your property taxes in the same year, skipping the next year completely. This technique may push you over the standard deduction in alternating years and thereby give you a greater tax benefit.
In the clumping years, it may also help to maximize your discretionary donations, gifts, and charity activities, further maximizing your tax benefit.
We are not a CPA firm, and as such recommend you see your tax advisor for confirmation of your specific situation, but this technique may work for you!
Have a Good Day!
JK