The standard deduction is the basic tax break that all taxpayers get, as long as they fall under a certain income limit. Specifically, the standard deduction is the amount you can subtract from your income before it is taxed. The government provides this as a sort of “tax break.” The amount of your standard deduction depends on your taxpayer filing status, your age, and whether you are disabled or claimed as a dependent on someone else’s tax return. As you can see from the tables below, the largest portion of your deduction comes automatically and depends on your filing status.
2010 Standard Deductions
0%
1%
0%
0%
0%
0%
0%
Additional Amount if Blind or Age 65 or
0%
0%
0%
2009 Standard Deductions
Additional Amount if Blind or Age 65 or
2008 Standard Deductions
Additional Amount if Blind or Age 65 or
2007 Standard Deductions
4%
4%
4%
4%
4%
4%
5%
Additional Amount if Blind or Age 65 or
4%
4%
4%
2006 Standard Deductions
Additional Amount if Blind or Age 65 or
In some cases, it might be better to opt for itemized deductions instead of the standard deduction. While taking the standard deduction is certainly less complicated than itemizing your deductions, it might not be cheaper. If you have a lot of itemized deductions—large charitable contributions, mortgage interest, etc.—you might reduce your taxable income by itemizing deductions. If after itemizing your deductions the amount is less than the standard deduction, obviously just take the standard route.
The IRS determines the standard deduction figures each year and must account for inflation—rising prices of goods and services. As you can see, from 2006 to 2010 the standard deduction amounts usually fluctuated year to year. Only in 2009 did the amounts remain the same as the previous year. Over that five year period, the standard deductions increased 10% practically across the board. If history is any indication of the future, you might expect next year’s standard deductions to increase by at least a couple percentage points.
Rob Berger
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Published or updated March 16, 2013.
{ 1 comment… read it below or add one }
Five year history, why not list the 2011 tax year?
Also, are there not increases to the standard deduction depending on type of worker, and age and disability?