Each year, millions of taxpayers choose whether to take the standard deduction or to itemize their deductions. The following seven facts from the IRS can help you choose the method that gives you the lowest tax.
- Qualifying expenses - Whether to itemize deductions on your tax return depends on how much you spent on certain expenses last year. If the total amount you spent on qualifying medical care, mortgage interest, taxes, charitable contributions, casualty losses and miscellaneous deductions is more than your standard deduction, you can usually benefit by itemizing.
Standard deduction amounts - Your standard deduction is based on your filing status and is subject to inflation adjustments each year. For 2011, the amounts are:
- Single $5,800
- Married Filing Jointly $11,600
- Head of Household $8,500
- Married Filing Separately $5,800
- Qualifying Widow(er) $11,600
- Some taxpayers have different standard deductions - The standard deduction amount depends on your filing status, whether you are 65 or older or blind and whether another taxpayer can claim an exemption for you. If any of these apply, use the Standard Deduction Worksheet on the back of Form 1040EZ, or in the 1040A or 1040 instructions.
- Limited itemized deductions - Your itemized deductions are no longer limited because of your adjusted gross income.
- Married filing separately - When a married couple files separate returns and one spouse itemizes deductions, the other spouse cannot claim the standard deduction and therefore must itemize to claim their allowable deductions.
- Some taxpayers are not eligible for the standard deduction - They include nonresident aliens, dual-status aliens and individuals who file returns for periods of less than 12 months due to a change in accounting periods.
- Forms to use - The standard deduction can be taken on Forms 1040, 1040A or 1040EZ. To itemize your deductions, use Form 1040, U.S. Individual Income Tax Return, and Schedule A, Itemized Deductions.
These forms and instructions may be downloaded from the IRS website at www.irs.gov or ordered by calling 800-TAX-FORM (800-829-3676).
TaxACT helps determine whether you benefit more by claiming the standard deduction or itemizing your deductions. TaxACT Free Federal Edition includes all e-fileable forms and schedules for simple and complex taxes, including Forms 1040, 1040A and 1040EZ, as well as Schedule A for itemized deductions. Start your TaxACT Free Federal Edition return now.
- Publication 17, Your Federal Income Tax (PDF)
- Schedule A, Itemized Deductions (PDF)