Standard deduction
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Under United States tax law, the standard deduction is a dollar amount that non-itemizers may subtract from their income and is based on filing status. It is available to US citizens and aliens who are resident for tax purposes and who are individuals, married persons, and heads of household 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.[1]
The standard deduction is distinct from personal exemptions, which also are available to all taxpayers and dependents.[2] Taxpayers may choose either itemized deductions or a standard deduction that results in the lesser amount of tax payable.[3]
Basic standard deduction
The applicable basic standard deduction amounts for tax years 2006–2016 are as follows:
| Filing status | |||||
|---|---|---|---|---|---|
| Year | Single | Married Filing Jointly | Married Filing Separately | Head of household | Qualifying Surviving Spouse |
| 2016[4] | $6,300 | $12,600 | $6,300 | $9,300 | $12,600 |
| 2015[5] | $6,300 | $12,600 | $6,300 | $9,250 | $12,600 |
| 2014[6] | $6,200 | $12,400 | $6,200 | $9,100 | $12,400 |
| 2013[7] | $6,100 | $12,200 | $6,100 | $8,950 | $12,200 |
| 2012[8] | $5,950 | $11,900 | $5,950 | $8,700 | $11,900 |
| 2011[9] | $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[10] | $5,450 | $10,900 | $5,450 | $8,000 | $10,900 |
| 2007[11] | $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;[12]
- The taxpayer's spouse is 65 years of age or older;[13]
- 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"); and/or[14]
- The taxpayer's spouse is blind (see definition above).[15]
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.[16]
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).[17]
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 2010. | $950 (minimum standard deduction for dependents) |
| Dependent who earns $2,000 in 2010 | $2,000 + $300 = $2,300 |
| Dependent who earns $6,000 in 2010 | $5,700 (maximum standard deduction for dependents) |
References
- 1040 Instruction Booklet for year 2005, Page 36.
- Revenue procedure 13-35, http://www.irs.gov/pub/irs-drop/rp-13-35.pdf, 2014 adjustments for inflation.
- ^ I.R.C. §§ 63(c)(3), 63(f)(1)(A), 63(f)(2) (2007).
- ^ See I.R.C. § 151 (2007)
- ^ Samuel A. Donaldson, Federal Income Taxation of Individuals: Cases, Problems and Materials, 2nd Edition (St. Paul: Thomson/West, 2007), 27, 29.
- ^ "In 2016, Some Tax Benefits Increase Slightly Due to Inflation Adjustments, Others Are Unchanged".
- ^ "In 2015, Various Tax Benefits Increase Due to Inflation Adjustments".
- ^ "IRS Annual Inflation Adjustments for 2014".
- ^ "IRS Annual Inflation Adjustments for 2013".
- ^ In 2012, Many Tax Benefits Increase Due to Inflation Adjustments; http://www.irs.gov/pub/irs-drop/rp-11-52.pdf Revenue Procedure 2011-52
- ^ IRS Publication 505 Chapter 2, Worksheet 2-3. 2011 Estimated Tax Worksheet—Line 2 Standard Deduction Worksheet
- ^ Revenue Procedure 2007-66
- ^ Consumer Price Index Adjustments for 2007, Revenue Procedure 2006-53, 2006-48 I.R.B. 996.
- ^ I.R.C. §§ 63(c)(3), 63(f)(1)(A) (2007).
- ^ I.R.C. §§ 63(c)(3), 63(f)(1)(B) (2007).
- ^ I.R.C. §§ 63(c)(3), 63(f)(2)(A), 63(f)(4) (2007).
- ^ I.R.C. §§ 63(c)(3), 63(f)(2)(B), 63(f)(4) (2007).
- ^ I.R.S. publication 17 page 141
- ^ I.R.S. publication 17 page 142