Saturday, April 19, 2008

What's A Standard Deduction Anyway?

One thing you can always count on is the standard tax deduction. This deduction is one almost everyone can take advantage of it is an amount that is taxable as a flat amount. Those who may not be able to take advantage of the tax reduction are those who may benefit more by an itemized tax deduction. Because of laws you can only do one or the other, not both. Those who go with itemized deductions can take advantage of medical expenses, charity and such while those who go with the reduction cannot.

Commonly the brackets for the standard tax deduction are updated every year, so the maximum advantage can be taken, that reflects current inflation. But the deduction that actually gets taken into consideration can vary with the filing status of each individual taxpayer. This means that the tax reduction can vary depending on if you are married filing single or jointly or as single head of household. It can vary by several thousand dollars, so you should take into consideration how you file very carefully if you are going to go with the standard tax deduction.

Those who are considered senior citizens, age 65 or older, have additional advantages when it comes to the reduction. For these individuals they are allowed a higher deduction. This higher deduction can also apply to those people who are legally blind. Yet another group of people who claim this higher deduction in the standard deduction are spouses of the blind or individual who is 65 or older.


Anonymous said...
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Anonymous said...

Thanks for explaining this; I had forgotten this information. In some instancs, this deduction would be better than itemizing