What Everyone Should Know About The Standard Deduction
The ‘standard deduction’ is a fixed dollar amount that reduces the amount of income that you have to pay tax on. The amount that you receive depends on your filing status and can change from year to year.
You can’t take the standard deduction if you are claiming itemized deductions.
Our guide looks at everything you need to know about the standard deduction.
2011 Standard Deduction Amounts
If you are aged under 65 on December 31st, the standard deduction amounts in 2011 are:
- Filing status: single/married filing separately – $5,800
- Filing status: married filing jointly/qualifying widow(er) with dependent child – $11,600
- Filing status: head of household: $8,500
There is an additional deduction amount for if you are a taxpayer and you are aged 65 or older, are blind, or both. To claim this additional amount based on your age, you or your spouse must be aged 65 or older on the last day of the tax year.
The additional amount for blindness will be allowed if you or your spouse are totally or partly blind on the last day of the tax year.
Reduced Standard Deduction
If another person can claim you as a ‘dependent’ on their own tax return, the amount of your standard deduction will be reduced.
In this scenario, the amount of the standard deduction is generally limited to the greater of:
- $950
- Your earned income for the year plus $300
The amount of the standard deduction for a dependent cannot be higher than the regular standard deduction amount.
Individuals Who Don’t Qualify For The Standard Deduction
There are some people who don’t qualify for standard deductions. These include:
- A married person if your filing status is ‘married filing separately’ and where your spouse is itemizing deductions
- An individual if you are a dual status alien (where you are considered both a non resident and resident alien during the same year) or non resident alien during any part of the current tax year
- A person if you change your annual accounting cycle and you are filing a return for a period of less than 12 months
What additional standard deductions do senior citizens get this year?
Josephine – In 2011, blind people and senior citizens qualify for an extra $1,150 in their standard deduction for married filers and $1,450 for singles and heads of household.