Video: Choosing Between Itemized and Standard Deduction

Individual tax compliance and planning refers to the adherence to tax regulations and the strategic approach individuals use to minimize their tax liability. This includes understanding and applying tax laws, accurately reporting income and deductions, and utilizing tax planning opportunities to optimize one's financial situation.

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Video Transcript

Instructor: Nick Palazzolo

Nick Palazzolo is head instructor of ExamPrep.ai CPA Review. Nick's teaching style is engaging & upbeat, combining practical Big 4 tax & assurance expertise with years of 1-on-1 coaching. His lessons are concise and emphasize what you need to know to pass. Whether you're a recent grad or working full-time, we’re confident you can conquer your CPA exams with Nick’s review.

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Now we'll see here, we talk about this a lot in individual income tax, but here, again, we're dealing with it. It's important to get your good practice in for the choice between itemizing deductions and using the standard deductions. Taxpayers, they often face the decision of whether to use itemized deductions or take the standard deduction. Obviously, it's easier to use the standard. It's just the amount that is assigned to your specific demographic that year. If you're a single taxpayer in year 23, for example, it is 12,950. This standard deduction does change year to year, so definitely memorize it and want to know it for married filing jointly, and there's one for each of the tax filing statuses. What is going to be our decision here? Well, obviously, we're either going to choose between the itemized or this simple number here, so we'll do all the fancy calculations to see what we're going to use. We have potential itemized deductions that include these, and I would memorize the Schedule A. That is just essentially a Schedule A flows into the 1040. I mean, it's a part of the 1040, and that's a big calculation, which has all the rules on how you treat these itemized deductions, how you treat state and local taxes, what we see right here, 7.5% deductible medical expenses. That's going to be listed on the Schedule A, so it doesn't hurt to just memorize those dang tax forms. As I always lose my breath saying, we've got our information here. Here's our background. Let's dive into the scenario on the next slide. All right. Right here, we are going to have our big old calculation. Let's just ground it a little bit. Let's just jump to the end because I love spoilers. We've

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Individual compliance, tax & financial planning

Module: 2 Concepts, 23 Videos

Introduction to Individual Tax Compliance and Planning

6:41

Impact of Equity Compensation Awards on Taxable Income

8:53

Alternative Minimum Taxable Income

6:29

Imputed Interest and Foreign-Earned Income