Previous Page: Publication 554 - Older Americans' Tax Guide - Adjustments to Income Next Page: Publication 554 - Older Americans' Tax Guide - Itemized Deductions Use   to find additional instances of index items.

Taxmap/pubs/p554-011.htm#TXMP1e05d763 Chapter 4 Deductions

Deduction

Most taxpayers have a choice of taking a standard deduction or itemizing their deductions. You benefit from the standard deduction if your standard deduction is more than the total of your allowable itemized deductions. If you have a choice, you should use the method that gives you the lower tax.

Taxmap/pubs/p554-011.htm#TXMP1dd4829b Standard Deduction

Standard Deduction

The standard deduction is a dollar amount that reduces the amount of income on which you are taxed. It is a benefit that eliminates the need for many taxpayers to itemize actual deductions. The standard deduction is higher for taxpayers who are age 65 or older or blind.

The standard deduction amounts for most taxpayers under age 65 are shown in Table 4-1.

Taxmap/pubs/p554-011.htm#TXMP5b3c911b Persons not eligible for the standard deduction.

Your standard deduction is zero and you should itemize any deductions you have if:

• You are married and filing a separate return, and your spouse itemizes deductions,
• You are filing a tax return for a short tax year because of a change in your annual accounting period, or
• You are a nonresident or dual-status alien during the year. You are considered a dual-status alien if you were both a nonresident alien and a resident alien during the year.

If you are a nonresident alien who is married to a U.S. citizen or resident at the end of the year, you can choose to be treated as a U.S. resident. See Publication 519, U.S. Tax Guide for Aliens. If you make this choice, you can take the standard deduction.

Taxmap/pubs/p554-011.htm#TXMP463a6f65 Higher standard deduction for age 65 or older.

You are entitled to a higher standard deduction if you are age 65 or older at the end of the year. You are considered 65 on the day before your 65th birthday. Therefore, you can take the higher standard deduction for 2004 if you were born on or before January 2,1940.

Use Table 4-2 to find the amount of your standard deduction.

Taxmap/pubs/p554-011.htm#TXMP5f07409a Higher standard deduction for blindness.

If you are blind on the last day of the year and you do not itemize deductions, you are entitled to a higher standard deduction. Use Table 4-2 to find the amount. You qualify for this benefit if you are totally or partly blind.

Taxmap/pubs/p554-011.htm#TXMP275d8dd4 Partly blind.

If you are partly blind, you must get a certified statement from an eye physician or registered optometrist that:

• You cannot see better than 20/200 in the better eye with glasses or contact lenses, or
• Your field of vision is not more than 20 degrees.

If your eye condition will never improve beyond these limits, the statement should include this fact. You must keep the statement in your records.

If your vision can be corrected beyond these limits only by contact lenses that you can wear only briefly because of pain, infection, or ulcers, you can take the higher standard deduction for blindness if you otherwise qualify.

Taxmap/pubs/p554-011.htm#TXMP650457bc Spouse 65 or older or blind.

You can take a higher standard deduction if your spouse is age 65 or older or blind and:

• You file a joint return, or
• You file a separate return and can claim an exemption for your spouse because your spouse had no gross income and an exemption for your spouse could not be claimed by another taxpayer.

You cannot claim the higher standard deduction for an individual other than yourself and your spouse.

Taxmap/pubs/p554-011.htm#TXMP2609e668 2004 Standard Deduction Tables

Table 4-1. Standard Deduction Chart for People Under Age 65*

If Your Filing Status is:	Your Standard Deduction is:
Single or Married filing separately	$4,850
Married filing jointly or Qualifying widow(er) with dependent child	9,700
Head of household	7,150

*Do not use this chart if you were 65 or older or blind, or if someone else can claim an exemption for you (or your spouse if married filing jointly). Use Table 4-2 or 4-3 instead.

Table 4-2. Standard Deduction Chart for People Age 65 or Older or Blind*

Check the correct number of boxes below. Then go to the chart.
You	65 or older	Blind
Your spouse, if claiming spouse's exemption	65 or older	Blind
Total number of boxes you checked
If Your Filing Status is:	And the Number in the Box Above is:	Your Standard Deduction is:
Single	1	$6,050
	2	7,250
Married filing jointly	1	10,650
or Qualifying	2	11,600
widow(er) with	3	12,550
dependent child	4	13,500
Married filing	1	5,800
separately	2	6,750
	3	7,700
	4	8,650
Head of household	1	8,350
	2	9,550

*If someone can claim an exemption for you (or your spouse if married filing jointly), use Table 4-3, instead.

If you are married filling a separate return and your spouse itemizes deductions, or if you are a dual-status alien, you cannot take the standard deduction even if you were 65 or older or blind.

Table 4-3. Standard Deduction Worksheet for Dependents*

If you were 65 or older or blind, check the correct number of boxes below. Then go to the worksheet.
You	65 or older	Blind
Your spouse, if claiming spouse's exemption	65 or older	Blind
Total number of boxes you checked

1.		Enter your earned income (defined below). If none, enter -0-.	1.
2.		Additional amount.	2.	$250
3.		Add lines 1 and 2.	3.
4.		Minimum standard deduction.	4.	$800
5.		Enter the larger of line 3 or line 4.	5.
6.		Enter the amount shown below for your filing status.
	·	Single or Married filing separately - $4,850	6.
	·	Married filing jointly or Qualifying widow(er) with dependent child - $9,700
	·	Head of household - $7,150
7.	Standard deduction.
	a.	Enter the smaller of line 5 or line 6. If under 65 and not blind, stop here. This is your standard deduction. Otherwise, go on to line 7b.	7a.
	b.	If 65 or older or blind, multiply $1,200 ($950 if married or qualifying widow(er) with dependent child) by the number in the box above.	7b.
	c.	Add lines 7a and 7b. This is your standard deduction for 2004.	7c.

Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. It also includes any amount received as a scholarship that you must include in your income.

*Use this worksheet only if someone else can claim an exemption for  you (or your spouse if married filing jointly).

Taxmap/pubs/p554-011.htm#TXMP5489f943 Decedents.

The amount of the standard deduction for a decedent's final return is the same as it would have been had the decedent continued to live. However, if the decedent was not 65 or older at the time of death, the higher standard deduction for age cannot be claimed.

Taxmap/pubs/p554-011.htm#TXMP6201e283 Examples.

The following examples illustrate how to determine your standard deduction using Tables 4-1 and 4-2.

Taxmap/pubs/p554-011.htm#TXMP7ca27057
Example 1.

Larry, 66, and Donna, 67, are filing a joint return for 2004. Neither is blind. They decide not to itemize their deductions. They use Table 4-2. Their standard deduction is $11,600.

Taxmap/pubs/p554-011.htm#TXMP578f2396
Example 2.

Assume the same facts as in Example 1 except that Larry is blind at the end of 2004. They use Table 4-2. Larry and Donna's standard deduction is $12,550.

Taxmap/pubs/p554-011.htm#TXMP4e9412d5
Example 3.

Susan, 67, who is blind, qualifies as head of household in 2004. She has no itemized deductions. She uses Table 4-2. Her standard deduction is $9,550.

Taxmap/pubs/p554-011.htm#TXMP09749bb3 Standard Deduction for Dependents

Standard Deduction, Dependent

The standard deduction for an individual for whom an exemption can be claimed on another person's tax return generally is limited to the greater of:

• $800, or
• The individual's earned income for the year plus $250 (but not more than the regular standard deduction amount, generally $4,850).

However, if the individual is age 65 or older or blind, his or her standard deduction may be higher. Use Table 4-3 to determine his or her standard deduction.

Previous Page:  Publication 554 - Older Americans' Tax Guide - Adjustments to Income Next Page:  Publication 554 - Older Americans' Tax Guide - Itemized Deductions Use     to find additional instances of index items.