How much is the standard deduction worth?
The standard deduction is based on your filing status. The amount changes every year, based on adjustments for inflation.
For 2012, the amounts are:
Married Filing Jointly: $11,900
Head of Household: $8,700
Married Filing Separately: $5,950
Qualifying Widow(er): $11,900
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 your taxable income. 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 (Form 1040). The standard deduction is higher for taxpayers who:
- Are 65 or older, or
- Are blind.