Standard deduction
From Wikipedia, the free encyclopedia
Individual taxpayers in the United States are faced with a choice when preparing their tax returns. Starting with their AGI (adjusted gross income), they can itemize their deductions (from a list of allowable items) and subtract the total from their AGI (and any applicable personal exemptions) to arrive at their taxable income. Alternately, they can elect to subtract the standard deduction for their filing status (and any applicable personal exemptions) to arrive at their taxable income.
The applicable standard deduction amounts for tax year 2005 are:
| Filing status | Standard Deduction |
|---|---|
| Single | $5,000 |
| Married Filing Jointly | $10,000 |
| Married Filing Separately | $5,000 |
| Head of household | $7,300 |
| Qualifying widow(er) | $10,000 |
The applicable standard deduction amounts for tax year 2006 are:
| Filing status | Standard Deduction |
|---|---|
| Single | $5,150 |
| Married Filing Jointly | $10,300 |
| Married Filing Separately | $5,150 |
| Head of household | $7,550 |
| Qualifying widow(er) | $10,300 |
The standard deduction is increased if any of the following conditions are met:
- The taxpayer is age 65 or older
- The taxpayer's spouse is age 65 or older
- The taxpayer is legally blind
- The taxpayer's spouse is legally blind
For each applicable condition, add $1,000 (if the filing status is married filing jointly, married filing separately, or qualifying widow(er)) or $1,250 (if the filing status is single or head of household) to the standard deduction specified above.
For example, a 70-year old single filer's standard deduction would be $6,250. A 40-year old blind single filer's standard deduction would also be $6,250. A married couple, ages 78 and 80, where one spouse is blind would have a standard deduction of $13,000.
[edit] References
2005 1040 Instruction Booklet, Page 36
