Publication 17 (2009), Your Federal Income Tax

IRS Resources

20. Standard Deduction

Table of Contents

What's New

Standard deduction increased. The standard deduction for most taxpayers who do not itemize their deductions on Schedule A of Form 1040 is higher in 2009 than it was in 2008. The amount depends on your filing status. In addition to the annual increase due to inflation adjustments, your 2009 standard deduction is increased by:

Any state or local real estate taxes you paid that would be deductible on Schedule A if you were itemizing deductions, up to $500 ($1,000 if married filing jointly),
Any state or local sales or excise taxes you paid on the purchase of a new motor vehicle after February 16, 2009, and
Any net disaster loss from a federally declared disaster.

You can use the 2009 Standard Deduction Worksheet in this chapter to figure your standard deduction. But to increase your standard deduction by taxes paid on the purchase of a new motor vehicle, you must use Schedule L (Form 1040A or 1040) and attach it to your return.

Introduction

This chapter discusses the following topics.

How to figure the amount of your standard deduction.
The standard deduction for dependents.
Who should itemize deductions.

Most taxpayers have a choice of either taking a standard deduction or itemizing their deductions. If you have a choice, you can use the method that gives you the lower tax.

The standard deduction is a dollar amount that reduces the amount of income on which you are taxed. It is a benefit that eliminates the need for many taxpayers to itemize actual deductions, such as medical expenses, charitable contributions, and taxes, on Schedule A of Form 1040. The standard deduction is higher for taxpayers who:

Are 65 or older,
Are blind,
Pay state or local real estate taxes,
Have a net disaster loss from a federally declared disaster, or
Paid state or local sales or excise taxes (or certain other taxes or fees in a state without a sales tax) on the purchase of a new motor vehicle after February 16, 2009.

You benefit from the standard deduction if your standard deduction is more than the total of your allowable itemized deductions.

Persons not eligible for the standard deduction. Your standard deduction is zero and you should itemize any deductions you have if:

You are married and filing a separate return, and your spouse itemizes deductions,
You are filing a tax return for a short tax year because of a change in your annual accounting period, or
You are a nonresident or dual-status alien during the year. You are considered a dual-status alien if you were both a nonresident and resident alien during the year.

Note. If you are a nonresident alien who is married to a U.S. citizen or resident alien at the end of the year, you can choose to be treated as a U.S. resident. (See Publication 519, U.S. Tax Guide for Aliens.) If you make this choice, you can take the standard deduction.

If an exemption for you can be claimed on another person's return (such as your parents' return), your standard deduction may be limited. See Standard Deduction for Dependents, later.

Useful Items - You may want to see:

Form (and Instructions)

Schedule L (Form 1040A or 1040) Standard Deduction for Certain Filers

Standard Deduction Amount

The standard deduction amount depends on your filing status, whether you are 65 or older or blind, whether an exemption can be claimed for you by another taxpayer, whether you pay state or local real estate taxes, whether you have a net disaster loss from a federally declared disaster, and whether you paid state or local sales or excise tax (or certain other taxes or fees in a state without a sales tax) on the purchase of a new motor vehicle after February 16, 2009. Generally, the standard deduction amounts are adjusted each year for inflation. Use Worksheet 20-1 to figure your standard deduction amount.

Decedent's final return. The amount of the standard deduction for a decedent's final tax return is the same as it would have been had the decedent continued to live. However, if the decedent was not 65 or older at the time of death, the higher standard deduction for age cannot be claimed.

Higher Standard Deduction for Age (65 or Older)

If you do not itemize deductions, you are entitled to a higher standard deduction if you are age 65 or older at the end of the year. You are considered 65 on the day before your 65th birthday. Therefore, you can take a higher standard deduction for 2009 if you were born before January 2, 1945.

Higher Standard Deduction for Blindness

If you are blind on the last day of the year and you do not itemize deductions, you are entitled to a higher standard deduction. You qualify for this benefit if you are totally or partly blind.

Partly blind. If you are partly blind, you must get a certified statement from an eye doctor or registered optometrist that:

You cannot see better than 20/200 in the better eye with glasses or contact lenses, or
Your field of vision is not more than 20 degrees.

If your eye condition will never improve beyond these limits, the statement should include this fact. You must keep the statement in your records.

If your vision can be corrected beyond these limits only by contact lenses that you can wear only briefly because of pain, infection, or ulcers, you can take the higher standard deduction for blindness if you otherwise qualify.

Spouse 65 or Older or Blind

You can take the higher standard deduction if your spouse is age 65 or older or blind and:

You file a joint return, or
You file a separate return and can claim an exemption for your spouse because your spouse had no gross income and an exemption for your spouse could not be claimed by another taxpayer.

You cannot claim the higher standard deduction for an individual other than yourself and your spouse.

Higher Standard Deduction for Real Estate Taxes

Your standard deduction is increased by any state and local real estate taxes you paid in 2009, up to $500 ($1,000 if married filing jointly). The taxes must be state or local real estate taxes that would be deductible on Form 1040 (Schedule A) if you were itemizing your deductions. Taxes deductible in arriving at adjusted gross income, such as taxes on business real estate and taxes on foreign real estate, cannot be used to increase your standard deduction.

If you are increasing your standard deduction by the amount of real estate taxes you paid, complete Schedule L (Form 1040A or 1040), attach it to your return, and be sure to check the box on line 40b of Form 1040 or line 24b of Form 1040A.

Higher Standard Deduction for Sales Taxes on New Motor Vehicles

Your standard deduction is increased by any state or local sales or excise taxes you paid in 2009 on the purchase of a new vehicle after February 16, 2009. The amount is limited to tax on the first $49,500 of the purchase price. The taxes must be state or local sales or excise taxes that would be deductible on Form 1040 (Schedule A) if you were itemizing your deductions. In states without a sales tax, certain other taxes or fees qualify if they are assessed on the purchase of the vehicle and are based on the vehicle's sales price or as a per unit fee. Taxes deductible in arriving at adjusted gross income, such as taxes on a vehicle used in your business, cannot be used to increase your standard deduction.

If you are increasing your standard deduction by the amount of these state or local sales or excise taxes, complete Schedule L (Form 1040A or 1040), attach it to your return, and be sure to check the box on line 40b of Form 1040 or line 24b of Form 1040A.

Higher Standard Deduction for Net Disaster Loss

Your standard deduction is increased by any net disaster loss from a federally declared disaster that occurred in 2009. This amount is on Form 4684, line 18.

If you are increasing your standard deduction by the amount of your net disaster loss, complete Schedule L (Form 1040A or 1040), attach it to your return, and be sure to check the box on line 40b of Form 1040.

Examples

The following examples illustrate how to determine your standard deduction using Worksheet 20-1.

Example 1.

Larry, 46, and Donna, 33, are filing a joint return for 2009. Neither is blind, and neither can be claimed as a dependent. They did not pay real estate taxes or sales or excise taxes on the purchase of a new motor vehicle or have a net disaster loss. They decide not to itemize their deductions. Because they are married filing jointly, they enter $11,400 on line 1 of Worksheet 20-1. They check the “No” box on line 2, so they also enter $11,400 on lines 4 and 10. Their standard deduction is $11,400.

Example 2.

The facts are the same as in Example 1 except that Larry is blind at the end of 2009, so he and Donna enter $1,100 on line 5 of Worksheet 20-1. They then enter $12,500 ($11,400 + $1,100) on line 10, so their standard deduction is $12,500.

Example 3.

Bill and Lisa are filing a joint return for 2009. Both are over age 65. Neither is blind, and neither can be claimed as a dependent. They did not pay real estate taxes or sales or excise taxes on the purchase of a new motor vehicle or have a net disaster loss. They do not itemize deductions, so they use Worksheet 20-1. Because they are married filing jointly, they enter $11,400 on line 1. They check the “No” box on line 2, so they also enter $11,400 on line 4. Because they are both over age 65, they enter $2,200 ($1,100 × 2) on line 5. They enter $13,600 ($11,400 + $2,200) on line 10, so their standard deduction is $13,600.

Example 4.

The facts are the same as in Example 3 except that Bill and Lisa paid $3,000 in local real estate taxes on their home in 2009, so they enter $3,000 on line 7 of the worksheet. They then enter $1,000 on lines 8 and 9 and $14,600 ($11,400 + $2,200 + $1,000) on line 10. Their standard deduction is $14,600. Because line 9 is greater than zero, they must complete Schedule L (Form 1040A or 1040) and attach it to their return.

Example 5.

The facts are the same as in Example 4 except that Bill and Lisa had a net disaster loss from a federally declared disaster of $8,000. That is the amount on line 18 of their Form 4684. They enter $8,000 on line 6 of their Standard Deduction Worksheet. On line 10 of the worksheet, they enter $22,600 ($11,400 + $2,200 + $8,000 + $1,000), which is their standard deduction. Because line 6 (and line 9) is greater than zero, they must complete Schedule L (Form 1040A or 1040) and attach it to their return.

Standard Deduction for Dependents

The standard deduction for an individual for whom an exemption can be claimed on another person's tax return is generally limited to the greater of:

$950, or
The individual's earned income for the year + $300 (but not more than the regular standard deduction amount, generally $5,700).

However, the standard deduction may be higher if the individual is 65 or older or blind, paid state or local real estate taxes, paid state or local sales or excise taxes on the purchase of a new motor vehicle, or had a net disaster loss from a federally declared disaster.

If an exemption for you (or your spouse if you are filing jointly) can be claimed on someone else's return, use Worksheet 20-1 to determine your standard deduction.

Earned income defined. Earned income is salaries, wages, tips, professional fees, and other amounts received as pay for work you actually perform.

For purposes of the standard deduction, earned income also includes any part of a scholarship or fellowship grant that you must include in your gross income. See Scholarships and fellowships in chapter 12 for more information on what qualifies as a scholarship or fellowship grant.

Example 1.

Michael is single. His parents claim an exemption for him on their 2009 tax return. He has interest income of $780 and wages of $150. He did not pay real estate taxes or sales or excise taxes on the purchase of a new motor vehicle or have a net disaster loss. He has no itemized deductions. Michael uses Worksheet 20-1 to find his standard deduction. Because he is single, he enters $5,700 on line 1. He checks the “Yes” box on line 2, enters $950 on line 3, and also enters $950 (the smaller of line 1 and line 3) on line 4. He leaves lines 5, 6, 7, 8, and 9 blank and enters $950 on line 10. His standard deduction is $950.

Example 2.

Joe, a 22-year-old full-time college student, is claimed on his parents' 2009 tax return. Joe is married and files a separate return. His wife does not itemize deductions on her separate return. Joe has $1,500 in interest income and wages of $3,800. He did not pay real estate taxes or sales or excise taxes on the purchase of a new motor vehicle or have a net disaster loss. He has no itemized deductions. Joe finds his standard deduction by using Worksheet 20-1. Because he is married filing a separate return, he enters $5,700 on line 1. He checks the “Yes” box on line 2, enters $4,100 ($3,800 + $300) on line 3, and also enters $4,100 (the smaller of line 1 and line 3) on line 4. He leaves lines 5, 6, 7, 8, and 9 blank and enters $4,100 on line 10. His standard deduction is $4,100.

Example 3.

Amy, who is single, is claimed on her parents' 2009 return. She is 18 years old and blind. She has interest income of $1,300 and wages of $2,900. She did not pay real estate taxes or sales or excise taxes on the purchase of a new motor vehicle or have a net disaster loss. She has no itemized deductions. Amy finds her standard deduction by using Worksheet 20-1. Because she is single, she enters $5,700 on line 1. She checks the “Yes” box on line 2, enters $3,200 ($2,900 + $300) on line 3, and also enters $3,200 (the smaller of line 1 and line 3) on line 4. Because she is blind, she enters $1,400 on line 5. She leaves lines 6, 7, 8, and 9 blank and enters $4,600 ($3,200 + $1,400) on line 10. Her standard deduction is $4,600.

Who Should Itemize

You should itemize deductions if your total deductions are more than the standard deduction amount. Also, you should itemize if you do not qualify for the standard deduction, as discussed earlier under Persons not eligible for the standard deduction .

You should first figure your itemized deductions and compare that amount to your standard deduction to make sure you are using the method that gives you the greater benefit.

You may be subject to a limit on some of your itemized deductions if your adjusted gross income (AGI) is more than $166,800 ($83,400 if you are married filing separately). See chapter 29 and the instructions for Schedule A (Form 1040), line 29, for more information on figuring the correct amount of your itemized deductions.

When to itemize. You may benefit from itemizing your deductions on Schedule A (Form 1040) if you:

Do not qualify for the standard deduction, or the amount you can claim is limited,
Had large uninsured medical and dental expenses during the year,
Paid interest and taxes on your home,
Had large unreimbursed employee business expenses or other miscellaneous deductions,
Had large uninsured casualty or theft losses,
Made large contributions to qualified charities, or
Have total itemized deductions that are more than the standard deduction to which you otherwise are entitled.

These deductions are explained in chapters 21–28.

If you decide to itemize your deductions, complete Schedule A and attach it to your Form 1040. Enter the amount from Schedule A, line 29, on Form 1040, line 40a.

Electing to itemize for state tax or other purposes. Even if your itemized deductions are less than the amount of your standard deduction, you can elect to itemize deductions on your federal return rather than take the standard deduction. You may want to do this, for example, if the tax benefit of being able to itemize your deductions on your state tax return is greater than the tax benefit you lose on your federal return by not taking the standard deduction. To make this election, you must check the box on line 30 of Schedule A.

Changing your mind. If you do not itemize your deductions and later find that you should have itemized — or if you itemize your deductions and later find you should not have — you can change your return by filing Form 1040X, Amended U.S. Individual Income Tax Return. See Amended Returns and Claims for Refund in chapter 1 for more information on amended returns.

Married persons who filed separate returns. You can change methods of taking deductions only if you and your spouse both make the same changes. Both of you must file a consent to assessment for any additional tax either one may owe as a result of the change.

You and your spouse can use the method that gives you the lower total tax, even though one of you may pay more tax than you would have paid by using the other method. You both must use the same method of claiming deductions. If one itemizes deductions, the other should itemize because he or she will not qualify for the standard deduction. See Persons not eligible for the standard deduction , earlier.

Worksheet 20-1. 2009 Standard Deduction Worksheet

Caution. If you are married filing a separate return and your spouse itemizes deductions, or if you are a dual-status alien, do not complete this worksheet. You cannot take the standard deduction even if you were born before January 2, 1945, are blind, paid real estate taxes, had a net disaster loss, or paid state or local sales or excise tax on the purchase of a new motor vehicle.
If you paid state or local sales or excise tax on the purchase of a new motor vehicle after February 16, 2009, you cannot use this worksheet to figure your standard deduction. You must use Schedule L (Form 1040A or 1040) and attach it to your return.
If you are filing Form 1040EZ, do not use this worksheet. Instead, see line 5 of Form 1040EZ.
1.	Enter the amount shown below for your filing status.
	Single or married filing separately — $5,700 Married filing jointly or Qualifying widow(er) — $11,400 Head of household — $8,350	1.


2.	Can you (or your spouse if filing jointly) be claimed as a dependent on someone else's return? No. Skip line 3; enter the amount from line 1 on line 4, and go to line 5. Yes. Go to line 3.
3.	Is your earned income* more than $650?
	Yes. Add $300 to your earned income. Enter the total	3.
	No. Enter $950
4.	Enter the smaller of line 1 or line 3		4.
5.	If born before January 2, 1945, or blind, multiply the number on Form 1040, line 39a (or Form 1040A, line 23a**) by $1,100 ($1,400 if single or head of household). Otherwise, enter -0-		5.
6.	Enter any net disaster loss from Form 4684, line 18**		6.
7.	Enter the state and local real estate taxes you paid that would be deductible on Schedule A (Form 1040), line 6, if you were itemizing your deductions. See the instructions for Schedule A (Form 1040), line 6. Do not include foreign real estate taxes	7.
8.	Enter $500 ($1,000 if married filing jointly)	8.
9.	Enter the smaller of line 7 or line 8**		9.
10.	Add lines 4, 5, 6, and 9. This is your standard deduction for 2009.		10.
Earned incomeincludes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. It also includes any amount received as a scholarship that you must include in your income. Generally, your earned income is the total of the amount(s) you reported on Form 1040, lines 7, 12, and 18, minus the amount, if any, on line 27 (or the amount you reported on Form 1040A, line 7). *If the amount on line 6 or line 9 of this worksheet is more than zero, you must complete Schedule L (Form 1040A or 1040) and attach it to your return. Also, if the amount on line 6 of this worksheet is more than zero, you cannot file Form 1040A; you must file Form 1040.

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