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Standard deduction

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Not to be confused with Personal exemption.

Under United States tax law, the standard deduction is a dollar amount that non-itemizers may subtract from their income before income tax (but not other kinds of tax, such as payroll tax) is applied. Taxpayers may choose either itemized deductions or the standard deduction, but usually choose whichever results in the lesser amount of tax payable.[1] The standard deduction is available to US citizens and aliens who are resident for tax purposes and who are individuals, married persons, and heads of household. The standard deduction is based on filing status and typically increases each year. It is not available to nonresident aliens residing in the United States (with few exceptions, for example, students from India on F1 visa status can use the standard deduction). Additional amounts are available for persons who are blind and/or are at least 65 years of age.[2]

The standard deduction is distinct from the personal exemption, which was eliminated by The Tax Cuts and Jobs Act of 2017 for tax years 2018–2025.[3]

Basic standard deduction

The applicable basic standard deduction amounts for tax years 2006–2020 are as follows:

Filing status
Year Single Married Filing Jointly Married Filing Separately Head of household Qualifying Surviving Spouse
2021 $12,550 $25,100 $12,550 $18,800 $25,100
2020[4] $12,400 $24,800 $12,400 $18,650 $24,800
2019[5] $12,200 $24,400 $12,200 $18,350 $24,400
2018[6] $12,000 $24,000 $12,000 $18,000 $24,000
2017[7] $6,350 $12,700 $6,350 $9,350 $12,700
2016[8] $6,300 $12,600 $6,300 $9,300 $12,600
2015[9] $6,300 $12,600 $6,300 $9,250 $12,600
2014[10] $6,200 $12,400 $6,200 $9,100 $12,400
2013[11] $6,100 $12,200 $6,100 $8,950 $12,200
2012[12] $5,950 $11,900 $5,950 $8,700 $11,900
2011[13] $5,800 $11,600 $5,800 $8,500 $11,600
2010 $5,700 $11,400 $5,700 $8,400 $11,400
2009 $5,700 $11,400 $5,700 $8,350 $11,400
2008[14] $5,450 $10,900 $5,450 $8,000 $10,900
2007[15] $5,350 $10,700 $5,350 $7,850 $10,700
2006 $5,150 $10,300 $5,150 $7,550 $10,300

Other standard deduction in certain cases

The standard deduction may be higher than the basic standard deduction if any of the following conditions are met:

  • The taxpayer is 65 years of age or older.[16]
  • The taxpayer's spouse is 65 years of age or older.[17]
  • The taxpayer is blind (generally defined as not having corrected vision of at least 20/200 or as having extreme "limitation in the fields of vision").[18]
  • The taxpayer's spouse is blind (see definition above).[19]

For each applicable condition, a taxpayer adds $1,100 to his/her standard deductions (for 2010). However, the additional deduction is $1,400 for unmarried individuals.[20]

For dependents, the standard deduction is equal to earned income (that is, compensation for services, such as wages, salaries, or tips) plus a certain amount ($300 in 2010). A dependent's standard deduction cannot be more than the basic standard deduction for non-dependents, or less than a certain minimum ($950 in 2010).[21]

Consider the following examples:

Taxpayer Standard Deduction in 2010
70-year-old single individual $5,700 + $1,400 = $7,100
40-year-old single individual who is blind $5,700 + $1,400 = $7,100
Married couple, ages 78 and 80, one of whom is blind $11,400 + $1,100 + $1,100 + $1,100 = $14,700
Dependent who earns $200 in 2019. $950 (minimum standard deduction for dependents)
Dependent who earns $6,000 in 2019 $6,000 + $300 = $6,300
Dependent who earns $13,000 in 2019 $12,200 (maximum standard deduction for single filing status in 2019)

References

  1. ^ Samuel A. Donaldson, Federal Income Taxation of Individuals: Cases, Problems and Materials, 2nd Edition (St. Paul: Thomson/West, 2007), 27, 29.
  2. ^ I.R.C. §§ 63(c)(3), 63(f)(1)(A), 63(f)(2) (2007).
  3. ^ See I.R.C. § 151 (2007)
  4. ^ https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2020/
  5. ^ https://www.creditkarma.com/tax/i/standard-deduction-amounts-2019/
  6. ^ https://www.cnbc.com/2017/12/22/the-gop-tax-overhaul-kept-this-1300-tax-break-for-seniors.html
  7. ^ "In 2017, Some Tax Benefits Increase Slightly Due to Inflation Adjustments, Others Are Unchanged".
  8. ^ "In 2016, Some Tax Benefits Increase Slightly Due to Inflation Adjustments, Others Are Unchanged".
  9. ^ "In 2015, Various Tax Benefits Increase Due to Inflation Adjustments".
  10. ^ "IRS Annual Inflation Adjustments for 2014".
  11. ^ "IRS Annual Inflation Adjustments for 2013".
  12. ^ In 2012, Many Tax Benefits Increase Due to Inflation Adjustments; https://www.irs.gov/pub/irs-drop/rp-11-52.pdf Revenue Procedure 2011-52
  13. ^ IRS Publication 505 Chapter 2, Worksheet 2-3. 2011 Estimated Tax Worksheet—Line 2 Standard Deduction Worksheet
  14. ^ Revenue Procedure 2007-66
  15. ^ Consumer Price Index Adjustments for 2007, Revenue Procedure 2006-53, 2006-48 I.R.B. 996.
  16. ^ I.R.C. §§ 63(c)(3), 63(f)(1)(A) (2007).
  17. ^ I.R.C. §§ 63(c)(3), 63(f)(1)(B) (2007).
  18. ^ I.R.C. §§ 63(c)(3), 63(f)(2)(A), 63(f)(4) (2007).
  19. ^ I.R.C. §§ 63(c)(3), 63(f)(2)(B), 63(f)(4) (2007).
  20. ^ I.R.S. publication 17 page 141
  21. ^ I.R.S. publication 17 page 142
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