Standard Deductions

From time to time people will ask me what the standard deductions are for a specific year and what the difference is between taking the standard deduction or itemizing.  Basically, if you have more itemized deductions than what your standard deduction would be than it may be more beneficial for you to itemize.  For example, taxpayers who have large medical bills in one year may want to itemize because the amount of the bills would exceed their standard deduction.  Soon I will post a list of allowable itemized deductions.  Below is a listing of standard deductions for the various filing status and year.

Standard Deduction Amounts for 2012

Standard Deduction Amounts for 2011

Standard Deduction Amounts for 2010

Special Rule for Married Couples Filing Separate Returns

If you are married filing separately, you and your spouse must both take the standard deduction or you must both itemize your deductions. You cannot mix-and-match (where one spouses itemizes and the other takes the standard deduction). As such, it usually makes sense to figure your taxes both ways (each spouse itemizing vs. each spouse taking the standard deduction) to see which will yield the best overall tax savings.

Standard Deduction Amounts for Dependents

Dependents have a variable standard deduction amount. The amount is determined by the larger of the following two figures:

  • $950, or
  • the dependent’s earned income plus $300, but not to exceed the standard deduction for the dependent’s filing status.
The dependent is usually single, so this makes the maximum standard deduction for a dependent $5,800 for 2011 or $5,950 for 2010.