Standard Tax Deduction - Learn How This Really Works!
These are the deductions that you get as a part of your normal
tax cut.
The standard tax deduction is a safety valve. It cuts your tax
by a flat sum and in a direct way. Totally hassle free, unlike
in itemized cuts where you have to go into greater detail of
everything. The government allows you any one of the following.
The slabs are revised annually so as to keep them under the
revised inflation costs.
Thus, -the standard deduction available to a single individual
in 2004 was $4,850; -for the head of household it was $7,150;
-for a married couple filing a joint return it was $9,700; -for
a qualifying widow (err) with dependent child it was $9,500;
-and for a married couple filing separate returns it was $4,850.
People over the age of 65 or who are blind get higher deductions
and also the spouses of such people.
If you are a part of somebody's deductions, then you can get a
lesser relief. As a student, you can claim a deduction under
grants as it is treated as an income.
The benefit is not available to those who are married but whose
spouse itemizes deductions; those who file a tax return for a
short tax year because of a change in their annual accounting
period; and to those whose status is that of a non-resident or
dual-status alien. A non-resident person married to a US citizen
can claim these benefits if they choose to be treated alone.
The next time you file your returns, take a close look at the
standard deduction you are entitled to. It could work better and
simpler than the itemized approach. And could save you not only
those dollars but also the time and effort too. After all there
are many more things in life than too a dollar....