About Standard Federal Income Tax Deductions

Purpose

• The IRS calculates the standard deduction by averaging taxpayers' itemized deductions, so that approximately 50 percent of taxpayers will benefit by taking the standard deduction instead of itemizing their deductions. This is done in order to simplify the process of tax calculation so as to reduce errors, without depriving the IRS of overall tax revenues.
  
  

Amount

• The amount of your standard deduction depends on your filing status. If you are single or married and filing separately, your standard deduction for 2008 was $5,700. If you were married and filing jointly, or were a widow or widower with a dependent child, the standard deduction was $11,400. If you were the head of your household and filing separately, your standard deduction was $8,350. Remember that the amount of the standard deduction varies from year to year--it generally increases by a small amount each year.
  
  

Additional Amounts

• The standard deduction is increased by $1,100 to $1,400 per taxpayer across all of the above categories if you (or your spouse) are blind or are over 65, and an increase of up to $2,800 is available if you (or your spouse) are both blind and over 65. Your standard deduction will also increase for every dependent child that you have (see IRS Publication 501 in Resources below).
  
  

Standard Deduction Versus Itemized Deductions

• To find out if you should take the standard deduction, see Schedule A of IRS Form 1040 and refer to the 1040 Instructions to calculate your itemized deductions. Itemized deductions are based on personal expenses, such as relocation expenses, medical and dental expenses, home mortgage interest expenses, real estate property taxes and other personal expenses. If the total of your itemized deductions exceeds the amount of your standard deduction, you should itemize your deductions. Otherwise, you should take the standard deduction.
  
  

Loopholes

• If you are married, filing separately, and want to claim the standard deduction, make sure that your spouse does not itemize his deductions; otherwise you cannot claim the standard deduction and will have to itemize deductions. If you are a dual-status alien-- a non-U.S. citizen who was a legal resident of the United States for only part of the tax year, your standard deduction is zero. Finally, your standard deduction will decrease if you are being claimed as a dependent on another taxpayer's tax return (see IRS Publication 501 in Resources below).