Each year, most taxpayers claim the standard deduction.
The amount is adjusted annually for inflation and varies depending upon a taxpayer’s filing status. Married couples that file joint returns are given the biggest standard deduction, while couples opting to file separately get the smallest. In between are the amounts for single taxpayers and those who qualify for head-of-household status. And the standard deduction is increased a bit for blind and elderly taxpayers.
Claim on any form
Using the standard deduction does not limit a taxpayer’s choice of tax return. It can be claimed on the long 1040, the 1040A or the short-form 1040EZ. Each of these returns lists the exact dollar amounts of the standard deduction for that tax year. (Don’t be alarmed by the difference in the amounts on Form 1040EZ and the other two returns; the EZ combines the standard deduction and exemption amounts to save on form space and calculations, true to its “easy” name and reputation.)
No expense tracking
The standard deduction’s biggest attraction: A taxpayer doesn’t have to keep track of each possible tax-deductible expense throughout the year. Plus, most taxpayers find the standard amount is generous enough to surpass any total they could accrue by adding up tax-related expenses separately.
Filing but dependent
However, sometimes even those who claim the standard deduction must do a bit more work when it comes time to file. This is the case for people who are filing their own returns but who also can be claimed as a dependent on someone else’s return. This might be the case for a young person who earned enough to necessitate filing but who is still living at home and is claimed as a dependent by his or her parents.
In this situation, the dependent filer must complete a worksheet found in the tax return instruction book to determine his or her precise standard deduction amount.
But most taxpayers who claim the standard deduction aren’t bothered with this extra work. They simply get their tax return, find their standard deduction amount on the form and go from there.