AT-2003-05

SHOULD I ITEMIZE?

Whether to itemize deductions on your tax return depends on how much you
spent on certain expenses last year. According to the IRS, money paid for
medical care, mortgage interest, taxes, contributions, casualty losses,
and miscellaneous deductions can reduce your taxes. If the total amount
spent on those categories is more than the standard deduction, you can
usually benefit by itemizing.

The standard deduction amounts are based on your filing status and are
subject to inflation adjustments each year. For 2002, they are:

Single $4,700
Married Filing Jointly $7,850
Head of Household $6,900
Married Filing Separately $3,925

The standard deduction amount is more for taxpayers age 65 or older and
for those who are blind.

Your itemized deductions may be limited if your adjusted gross income is
more than $137,300, or $68,650 for those Married Filing Separately. This
limit applies to all itemized deductions except medical and dental
expenses, casualty and theft losses, gambling losses, and investment
interest.

When a married couple files separate returns and one spouse itemizes
deductions, the other spouse must also itemize and cannot claim the
standard deduction.

There are some taxpayers who are not eligible for the standard deduction.
They include nonresident aliens, dual-status aliens, and individuals who
file returns for periods of less than 12 months. For additional
information, see Publication 501,
“Exemptions, Standard Deduction, and Filing Information.”

For more details on itemized deductions, see the instructions for Schedule
A, Form 1040, or Publication 17, “Your Federal Income Tax.” You may
download publications and forms from the IRS Web site at www.irs.gov or
you may order them by calling toll free 1-800-TAX-FORM (1-800-829-3676).

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