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Everything You Need To Know About Standard Tax Deduction

 

 

2013 Standard Tax Deduction

A standard deduction is the amount of money a tax filer may subtract from his or her income before determining federal tax liability.

Government EmployeeA lower tax liability on reduced taxable income means more money in your pocket, and not wasted by a government employee guzzling drinks in a Las Vegas hot tub.

Here’s a hypothetical example of how a standard deduction will lower a person’s taxable income:

Example: Parker, single with no dependents, has adjusted gross income of $50,000 for 2012. He claims the standard deduction of $6,100 and one personal exemption of $3,900.

Although Parker had income of $50,000, his taxable income is $40,000 (adjusted gross income – standard deduction – personal exemption).

The amount of a standard deduction will vary based on a taxpayer’s filing status, age and whether he or she is disabled or claimed as a dependent on someone else’s tax return.

Standard Deduction Amounts for 2013

Based on President Obama’s 2013 Budget and Congress failing to extend certain tax cuts, 2013 standard deductions will be as follows:

  • Married Filing Jointly (MFJ) – Increase to $12,200
  • Single and Married Filing Separately – Increase to $6,100
  • Head of Household: Increase to $8,950

 

Comparison for 2012 and 2013 Standard Deduction

Standard Deduction20122013
Single and Married Filing Separately$5,950$6,100
Married Filing Jointly$11,900$12,200
Head of Household$8,700 $8,950

How To Enter Standard Deduction

Assuming Federal Tax Forms (1040, 1040A and 1040EZ) do not change, claiming the standard deduction in lieu of itemized deductions is entered as follows:

If filing Form 1040, enter on Line 40:

Tax Form 1040

 

 

 

 

 

 


If filing Form 1040A, enter on Line 24:

Tax Form 1040A

 

 

 

 

 

 

 

If filing Form 1040EZ, enter on Line 5:

Tax Form 1040EZ

 

 

 

 

 

 

 

 

Alternative:

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More Tax Related Information:

 

 

 

 

 

by MoneyandMap.com Tuesday · comments

categories: Tax Return Tips

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