How to Utilize the Standard Tax Deduction

Most Taxpayers Can Use the Standard Deduction to Reduce Their Taxable Income

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Everyone is entitled to reduce their taxable income by utilizing either the standard deduction or by itemizing their deductions. You always want to choose the deduction that will reduce your tax liability the most, giving you the best savings possible on your tax return. Added with the personal exemption amount, the standard deduction reduces your adjusted gross income to arrive at your taxable income.

How much of a standard deduction you qualify for depends on your filing status, age, and whether you are blind.

Standard Deduction Amounts
Filing StatusYear 2015Year 2016
Single$6,300$6,300
Head of Household$9,250$9,300
Married Filing Jointly$12,600$12,600
Married Filing Separately$6,300$6,300
Qualifying Widow or Widower$12,600$12,600
Dependent$1,050 - $6,300$1,050 - $6,300
   
Additional Standard Deduction for Blindness or Age
Single or head of household$1,550$1,550
Married filing jointly, Married filing separately, or qualifying widow or widower$1,250$1,250

 

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. For years 2016 and 2015, the dependent's standard deduction is calculated by finding the larger of the following two amounts:

  • $1,050, or
  • the dependent's earned income plus $350, but not to exceed the standard deduction for the dependent's filing status.

    For 2014, dependent's standard deduction was calculated by finding the larger of the following two amounts:

    • $1,000, or
    • the dependent's earned income plus $350, but not to exceed the standard deduction for the dependent's filing status.

    Additional Standard Deduction Based on Age or Blindness

    People age 65 or older, and people who are legally blind receive an additional standard deduction. The standard deduction is calculated by adding the person's standard deduction (based on their filing status), plus the additional amount.

    Reference Material on the IRS.gov Web site

     

    First published 10/20/2008. Revised 10/28/2015.