Topics
Claiming the Standard Deduction
On your 2007 Form 1040, 1040A, or 1040EZ, you are allowed a standard deduction. This is an "automatic" deduction you may claim regardless of your actual expenses. The great thing about the standard deduction is that it reduces your adjusted gross income (AGI), thus lowering your overall tax bill. However, don't just take the standard deduction and walk away. You should only choose it if it exceeds the itemized deductions that can be claimed on Schedule A of your 1040 return.
The basic standard deduction is allowed if you are under age 65 and not blind. The amount is adjusted each year to reflect inflation. For 2007, the basic standard deduction is:
- $10,700 if married filing jointly or a qualifying widow(er);
- $7,850 if filing as a head of household;
- $5,350 if single; and
- $5,350 if married filing separately.
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Husbands and Wives Filing Separate Returns
If you and your spouse file separate returns for 2007, and neither of you is a qualifying head of household, you must both claim itemized deductions or limit yourselves to a standard deduction of $5,350 each. You must both make the same election; when one of you itemizes the other is not entitled to any standard deduction. That is, if your spouse has itemized deductions exceeding $5,350 and elects to itemize, you must also itemize, even if your itemized deductions are less than $5,350.
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Standard Deduction if 65 or Older or Blind
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Age and blindness are determined as of December 31, 2007. However, if your 65th birthday is January 1, 2008, the IRS treats you as reaching age 65 on the last day of 2007, allowing you to claim the standard deduction for those age 65 or over on your 2007 return.
Your total standard deduction consists of two parts:
1. The basic standard deduction shown above for your filing status, plus
2. an extra standard deduction for being age 65 or older, or blind.
The amount of the extra deduction for 2007 is $1,300 if you are filing as single or head of household; and $1,050 if you are married, whether filing jointly or separately, or your filing status is qualifying widow(er).
If you are married filing separately, you may claim the standard deduction only if your spouse also claims the standard deduction on his or her return.
Total or Partial Blindness: An additional standard deduction is allowed to a person who is completely blind as of December 31, 2007. You also qualify if you are partially blind and attach a letter certified by your doctor stating that you cannot see better than 20/200 in your better eye with lenses or that your field of vision is 20 degrees or less. Keep a copy of this letter. If the certification states that your vision will never improve beyond these limits, you will not have to file a new certification in later years; you will only have to attach a statement referring to the earlier certification.
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Standard Deduction for Dependents
If someone can claim you as a dependent for 2007, your standard deduction is determined under the following rules. You may elect to itemize deductions if these exceed the allowable standard deduction. If you are married and your spouse itemizes on a separate return, you must itemize.
Dependent under age 65 and not blind: If you can be claimed as another taxpayer's dependent for 2007, your standard deduction is the greater of $850 or earned income plus $300, but no more than the basic standard deduction for your filing status.
Dependents age 65 or older or blind: Your standard deduction for 2007 is the total of these two steps:
1. The greater of $850 or earned income plus $300; plus
2. $1,050 if you are married or a qualifying widow or widower, or $1,300 if single or head of household. If you are age 65 or older and you are also blind, multiply the applicable figure, $1,050 or $1,300, by two.
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Summary
- The standard deduction is an "automatic" deduction you may claim regardless of your actual expenses.
- For 2007, the basic standard deduction is: $10,700 if married filing jointly or a qualifying widow(er), $7,850 if filing as a head of household, $5,350 if single, and $5,350 if married filing separately.
- If you and your spouse file separate returns for 2007, and neither of you is a qualifying head of household, you must both claim itemized deductions or limit yourselves to a standard deduction of $5,350 each.
- A larger standard deduction is provided for persons who are age 65 or over, or who are blind.
- If you can be claimed as a dependent on another person's return in 2007, special rules apply to your standard deduction.
