Individual taxpayers in the United States are faced with a choice when preparing their tax returns. Starting with their AGI (adjusted gross income), they can itemize their deductions (from a list of allowable items) and subtract the total from their AGI (and any applicable personal exemptions) to arrive at their taxable income. Alternately, they can elect to subtract the standard deduction for their filing status (and any applicable personal exemptions) to arrive at their taxable income.
The applicable standard deduction amounts for tax year 2002 are:
Standard Deductions, tax year 2002
Filing status
Standard deduction
Single
4700
Married filing joint
7850
Married filing separate
3925
Head of household
6900
Qualifying widow(er)
7850
The standard deduction is increased if any of the following conditions are met:
For each applicable condition, add $900 (if the filing status is married filing joint, married filing separate, or qualifying widow(er)) or $1150 (if the filing status is single or head of household) to the standard deduction specified above.
For example, a 70-year old single filer's standard deduction would be $5850. A 40-year old blind single filer's standard deduction would also be $5850. A married couple, ages 78 and 80, where the taxpayer is blind would have a standard deduction of $10,550.
The normal standarddeduction amounts are $4,750 for an individual with the filing status of single and $7,000 for a head of household.
An often-missed break: The $9,500 deduction is also available to someone qualifying as a "surviving spouse" – IRS lingo for a widow or widower who has a dependent child and is entitled to use joint-return rates for two years after the death of a spouse in 2001 or 2002.
Some examples: The deduction rises from $4,750 to $5,900 for a single person who is age 65 or older, and from $4,750 to $7,050 for a single person who is at least 65 and blind.
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