It is important to plan your taxes before the due date of filing. One important thing to consider is what action you want to take with regard to deductions. A tax deduction can help reduce the total taxable income you claim on the form. It will help with tax breaks during the process. You need to determine the deductions you should claim and one of the ideal options is to consider standard deduction. A lot of taxpayers claim the standard deduction. Are you aware of what it is and whether you qualify for it?
What is the deduction?
Offered by the Internal Revenue Service, the standard deduction is offered to taxpayers on Form 1040. You might come across many situations where you take other deductions but you cannot claim it. However, the standard deduction is a primary option offered in the IRS.
The deduction is a specific amount that is deducted from the total taxable income. This number will depend on your filing status but there are other factors that play a significant role. This figure will go up every year but it had a huge leap in the past year due to the passing of the Tax Cuts and Jobs Act. This deduction makes a huge difference for all taxpayers. It can reduce many dollars from your taxable income. Based on what the gross income prior to standard deduction was, it can change the tax bracket you are in and can decrease not only the amount of tax you are liable to pay but also the rate at which you are being taxed.
The standard deduction for 2019-2020
The amount you can claim in the standard deduction will be based on how you file the taxes. Hence, if you want to know who qualifies it, these are below-mentioned aspects you need to look into.
Your filing status will help determine the standard deduction. For the year 2019, the deduction will be as follows:
- Single- $ 12,200
- Married filing jointly- $ 24,400
- Married filing separately – $ 12,200
- Head of household – $ 18,350
You can only claim the deduction when married and filing separately if the spouse is also claiming it.
The deduction for the year 2020 will be as follows:
- Single – $12,400
- Married and filing jointly – $24,800
- Married and filing separately – $ 12,400
- Head of household – $ 18,650
Blindness and age
Age is another factor that causes a difference in the standard deduction. Individuals who are aged 65 and above have different deduction amount. Those who are blind will also have a different standard deduction. Both the taxpayers have the same difference in the standard deductions.
Even if you are a dependent, you will be eligible for a standard deduction but the amount will decrease.
In order to claim a deduction in a specific accounting period, you cannot change the annual accounting period. If you file a return for a certain period of less than 12 months, you will not be able to claim for a deduction.
If you were a dual-status alien or a nonresident alien at any point in time in the year, you cannot claim the deduction. However, there is an exception here. Individuals who are a nonresident alien and marry a resident alien or a U.S. citizen can claim the standard deduction. You need to file a joint return and treat the nonresident alien as a U.S. citizen.
Who cannot claim the standard deduction?
Listed below are taxpayers who cannot claim a standard deduction.
- A married taxpayer who files as a married, separately and whose spouse itemizes deductions.
- Taxpayers who file a return for a period of less than 12 months because of a change in an annual accounting period.
- Individuals who are nonresident alien or dual-status alien in the year.
- A partnership, trust, estate or a common trust fund.
How to claim the standard deduction?
Now that you are aware of the amount of standard deduction and whether you are eligible for it or not, here is how you can claim it. Claiming the standard deduction is less complicated. Since you know what the amount is, you only need to file for it. You do not need any schedule, only Form 1040. In the form, on line 8, you need to put your standard deduction.
The process to claim the deduction is not at all complicated. You need to be aware of your status as a resident and identify the filing status. Once you know the filing status, you will be able to identify the amount you are eligible to claim. The deduction is an important part of annual filing and it is important to be aware of the amount you can claim each year.