The tax code provides several ways to control your tax bill through deductions and credits. Tax deductions allow you to reduce your taxable income, and tax credits allow you to directly reduce your tax liability.
Before the tax reform in 2018, you may have wondered whether you should itemize your deductions or simply claim the standard deduction. That decision got a lot easier after the 2017 Tax Cuts and Jobs Act passed. You typically don't itemize if the standard deduction saves you more on your tax bill.
You should calculate your itemized deductions and compare them to the standard deduction each year to get the most out of the tax savings available to you. For 2024, these amounts increase to $14,600 and $29,200, respectively.
In 2024, you must file a tax return if your gross income exceeds certain thresholds based on your filing status and age: $13,850 for single filers under 65, $27,700 for married couples filing jointly under 65, $20,800 for heads of household under 65, among others. You must also file if you earned $400 or more from self-employment, are claimed as a dependent with unearned income over $1,250 or earned income over $12,850, or owe special taxes like the alternative minimum tax. For more details, refer to IRS Publication 501.