Bankrate's 2010 Tax Guide
Men with telescope and magnifying glass
2009 tax deduction amounts

Standard deductions for dependent taxpayers

Sometimes you might file a return, for example, to get a refund of withheld money, even though you can be claimed as a dependent on someone else's return.

In this case, a dependent taxpayer who is younger than 65 and not blind can take as a standard deduction the greater of $950 or his or her earned income plus $300. This deduction amount, however, cannot exceed the basic standard deductions for the dependent taxpayer's filing status, which in 2009 is $5,700.

Itemized deductions

Although most taxpayers claim the standard deduction, all taxpayers may choose to itemize deductions and claim that amount if it is larger than their allowable standard deduction amount.

You must file Form 1040 and Schedule A to itemize.

Some itemized deductions are limited based on a taxpayer's adjusted gross income. For 2009, the following limits apply to itemized deductions:

Limits on itemized deductions
Medical expensesAmount exceeding 7.5 percent of your adjusted gross income, or AGI, is deductible.
Mortgage loan interestGenerally fully deductible for loans totaling $1 million or less on your primary residence or second home.
Home equity loan interestGenerally deductible for loans up to $100,000 that are secured by your home.
Charitable contributionsMost are fully deductible as long as the gift amount does not exceed 50 percent of AGI.
Casualty lossesDeductible after subtracting insurance reimbursements, 10 percent of your AGI and $100.
Casualty losses in a national disaster areaNo AGI limitation for net disaster losses, but the dollar amount reduction of the loss is $500; applies to disasters declared in 2008 and 2009; the losses can be claimed without itemizing (Schedule L).
Miscellaneous expensesAmount exceeding 2 percent of AGI is deductible.

In addition, overall itemized deductions also could be reduced if a taxpayer's AGI exceeds a certain amount, adjusted annually for inflation. For 2009 returns, the reduction of total itemized deductions begins for a taxpayer with an adjusted gross income of $166,800. This income level applies to single, head of household and married filing jointly taxpayers. Taxpayers who are married but file separate returns will see their itemized deductions reduced on AGI of $83,4005 or more.

<< Back to Bankrate's 2010 Tax guide table of contents.


Show Bankrate's community sharing policy
          Connect with us

Connect with us