How do deductions work?

[olliepower]

First off, i am a total tax noob and really know nothing about it, so pardon me if this sounds dumb. I am single and really owno nothing of value ie(no house, no car) i only have a 401k plan, my income from my job, and recreational poker. Now here is the question lets pretend that i make 15k a year from my job, 5k in winnings, and 5k in losses. If i were to file the itemized deduction i would still only be taxed as if i had 15K correct?

Also, can it be advantagous to just take the standard dedution if your taxable income is low enough? For example, last year I paid a little over under 1000$ in taxes, and got a pretty nice tax return of like 300-400$. If my poker winnings are low enough, could it actually be better for me to just report winnings and not deduct losses? How low can your winnings be for this to work if it does indeed work?

As far as deductions go, if you itemize, can you always get at least the standard deduction?

[grapabo]

You have two realms to work with - your standard deduction or your itemized deductions. If you are filing as a single taxpayer, your standard deduction for 2005 is $5,000 (assuming you're not over age 65 and not blind).

The itemized deductions emcompass a lot of different deductions, including your gambling losses (to the extent of your gambling winnings), your mortgage interest, and your state taxes. The federal schedule A will show you all of your options.

Whichever is greater, your standard or itemied deductions, will be the likely candidate to use on your federal return. But note that there might be some tweaks on your state income tax return, depending on where you have to report your income.