Hi Tax Experts,


Can some one please explain the difference between itemized deductions Vs. Std. deductions and how this will affect the returns when you are in OPT

Please Advice.

The Std deduction you get simply for being you - it is the same for everyone depending on Status (Single, Married-filing Joint etc.)

To itemize your deductions you need to have more Line items on the Sch A then the Std deduction. Certain expenses can be itemized and deducted from your taxable income.

Go to IRS.GOV and look at the instructions to form 1040

Itemized deductions are bacially your home mortgage interest paid, your property taxes, also some heatlh expenses/unreinbursed work expenses.

Which ever number is greater, that it what you can use. If you don't own a home, you're more than likely going to use the standard deduction.

Itemized deductions get tricky when you start getting in AMT. That tax mostly hits middle income families..

What you can do for fun is go online at say TurboTax and enter your information both ways - with the standard deduction and the itemized deductions and see which way would yield you the greater return. It does not cost anything to go online with this service but it only costs when you actually use the service to file your taxes. Try it. I'll bet you probably will take home more from a standard deduction in the end unless you have loads of legit expenses to claim. You also have to be super careful just what you take as a deduction as the IRS likes to audit those individuals who do the itemized returns and you could get dinged. The only time I itemized my deductions I got dinged by them and I had a CPA prepare my taxes that year!

The SINGLE standard deduction for 2008 is $5,450, and for a married couple, it is $10,900, so unless your itemized deductions are GREATER than those figures, you will likely use the standard deduction.

As a general rule, you must own a home on which you are paying a mortgage to make itemizing worthwhile.

If you are a nonresident alien, you cannot claim the standard deduction.

What IntlTax says is true for all non-resident aliens except Indian citizens on a F-1 or J-1 visa. Indian citizens on a F-1 or J-1 visa may claim the single standard deduction when they file Form 1040NR or 1040NR-EZ.

Good point about the Indian citizens.