Standard Deduction Under Internal Revenue Code Simplified?

irc standard deductionIt is a fact that most taxpayers cannot cope with many tax laws about various tax deductions available and further seldom maintains all kinds of documentation required for a claim of deduction while computing taxable income. So, in the year 1944, a simpler lump sum deduction -known as Standard Deduction– was conceptualized. So, this is allowed to all US taxpayers if he does not go for itemized deductions. In a way, the standard deduction is also good for tax administration as the authorities are not required to scrutinize all claims of documentation-big or small. The social touch was added to it vide Revenue Act 1944 and as on today, the IRC standard deduction, combined with personal tax exemption, are tools to help the low-income earning taxpayer from paying tax, thus improve his purchasing power.

Major Points Regarding Standard Deduction

  1. The standard deduction is deducted after you calculate Adjusted Total Income (ADI)
  2. A tax payer can chose either standard deduction or the itemized deduction to be deducted from ADI. Not both.
  3. Certain tax payer are not eligible for standard deduction . They are :
    1. A married individual filing as married filing separately whose spouse itemizes deductions
    2. An individual who was a nonresident alien or dual status alien during any part of the year  . There are some exception, however, to this rule . An individual who is nonresident alien or having dual status alien during any part of the year may take the standard deduction in the following circumstances:
      • A nonresident alien who is married to a U.S. citizen or resident alien at the end of the tax year and makes a joint election with his or her spouse to be treated as a U.S. resident for the entire tax year;
      • A nonresident alien at the beginning of the tax year who is a U.S. citizen or resident by the end of the tax year, is married to a U.S. citizen or resident at the end of such tax year, and makes a joint election with his or her spouse to be treated as a U.S. resident for the entire tax year; and
      • Certain residents of India covered by paragraph 2 of Article 21 (Payments Received by Students and Apprentices) of the United States-India Income Tax Treaty.
    3. An individual who files a return for a period of less than 12 months due to a change in his or her annual accounting period
    4. An estate or trust, common trust fund, or partnership

How Much Standard Deduction ?

For tax year 2017 & 2016, the standard deduction amounts are as follows:

Tax Year 2017

Filing Status Standard Deduction
Single $6,350
Married Filing Jointly $12,700
Married Filing Separately $6,300
Head of Household $9,350
Qualifying Widow(er) $12,600

Tax Year 2016

Filing Status Standard Deduction
Single $6,300
Married Filing Jointly $12,600
Married Filing Separately $6,300
Head of Household $9,300
Qualifying Widow(er) $12,600

Additional IRC  standard deduction

  • Additional standard deduction is applicable if you are 65 years ason birthdate falling in a tax year. So , if your 65th birthday was Jan. 1, the IRS considers you age 65 for the previous tax year and you may claim the larger standard deduction.
  • Another additional standard deduction of  $1,250 is available if you are blind  .Please note , even if you are partially blind , you can claim additional standard deduction by attaching a letter from your physician attesting to your limited vision.
  • The additional standard deduction amount increases to $1,550 if the individual is also unmarried and not a qualifying widow(er).

In the form 1040 or  Form 1040A , you will have to select the Boxes , each one for one additional standard deduction. So , for age creiteria , there is one , for blindness there is one . In case of married filing jointly, thus there are four baoxes available for the tick .

The final box count is used to figure the adjusted irc standard deduction amount.

2016

standard deduction for taxpayers older than 65 and/or visually impaired

Filing status Number of boxes checked Standard deduction amount
Single ( 65 yrs or above or blind or both ) 1
2
$7,850
$9,400
Married filing jointly ( 2 for each person , total four) 1
2
3
4
$13,850
$15,100
$16,350
$17,600
Married filing separately 1
2
3
4
$7,550
$8,800
$10,050
$11,300
Head of household 1
2
$10,850
$12,400
Qualifying widow(er) with dependent child 1
2
3
4
$13,850
$15,100
$16,350
$17,600

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