Every tax year, you have the option to either itemize your return or take the standard deduction. The standard deduction amount is set by the IRS and is typically adjusted annually for inflation. If your itemized deductions add up to less than the amount of the standard deduction, you should take the standard deduction.
Standard Deduction Details
The standard deduction decreases your taxable income, which leads to a lower tax bill. The tax year and your filing status affect the exact amount of the standard deduction. Single and married filing separately filers get the lowest deduction, while married filing jointly and qualifying widow or widower earn the highest. Other issues can affect the standard deduction too, like age, blindness and dependent status.
Standard Deduction for 2019 & 2020
Here are the numbers for the 2019 and 2020 tax years:
Standard deduction 2019
Standard deduction 2020
Single and married filing separately
Head of household
Widow / widower and married filing jointly
In both years, taxpayers who reach age 65 by the end of the year get an increase in the standard deduction:
- Single filers and heads of household get an increase of $1,650.
- Married filing jointly returns get an increase of $1,300 for each spouse who turns 65 during the tax year. The IRS considers birthdays on January 1st to have occurred during the previous tax year.
Tax filers who are legally blind get a raise of $1,650 if they file single or head of household. For married filing jointly returns the standard deduction increases by $1,300 for each spouse who is legally blind. These figures are the same in 2019 and 2020.
Qualifications to the Standard Deduction
The standard deduction can be enlarged by the net amount of a casualty if the event is a federally-declared disaster or the result of one. This includes storms, terror attacks, tornadoes, floods, fires, and car accidents.
For married filing separately returns, if one spouse itemizes, the other spouse cannot use the standard deduction.
Different rules apply to tax filers who are claimed as a dependent on another person’s return. For both 2019 and 2020, the standard deduction for dependents is the larger of $1,100 or the sum of the dependent’s earned income plus $350. In the latter case, the deduction cannot exceed the normal standard deduction.
Sound confusing? It doesn’t have to be! If you need a hand with your next tax return, click the button below to schedule an appointment with a Glass Jacobson CPA.
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