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Taxmap/pubs/p929-004.htm#TXMP1dd4829b Standard Deduction

Standard Deduction

The standard deduction for an individual who can be claimed as a dependent on another person's tax return is generally limited to the larger of:

1. $800, or
2. The individual's earned income plus $250, but not more than the regular standard deduction (generally $4,850).

However, the standard deduction for a dependent who is age 65 or older or blind is higher.

Certain dependents cannot claim any standard deduction. See Standard Deduction of Zero, later.

Taxmap/pubs/p929-004.htm#TXMP24c424e8 Table 2.

Use Table 2 to figure the dependent's standard deduction.

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Table 2. Standard Deduction Worksheet for Dependents Use this worksheet only if someone can claim you (or your spouse, if filing jointly) as a dependent. If you were 65 or older and/or blind, check the correct number of boxes below. Put the total number of boxes checked in box c and go to line 1. a. You 65 or older    Blind    b. Your spouse, if claiming spouse's exemption 65 or older    Blind     c. Total boxes checked          1. Enter your earned income (defined below) plus $250. If none, go on to line 3. 1.          2. Minimum amount.   2. $800   3. Compare lines 1 and 2. Enter the larger of the two amounts here. 3.          4. Enter on line 4 the amount shown below for your filing status.       Single or Married filing separately - $4,850 Married filing jointly or qualifying widow(er) with  dependent child - $9,700 Head of household - $7,150 4.          5. Standard deduction.         a. Compare lines 3 and 4. Enter the smaller amount here. If under 65 and not blind, stop here. This is your standard deduction. Otherwise, go on to line 5b. 5a. 5a.          b. If 65 or older or blind, multiply $1,200 ($950 if married or qualifying widow(er) with dependent child) by the number in box c above. Enter the result here. 5b.          c. Add lines 5a and 5b. This is your standard deduction for 2004. 5c.          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 income.

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Example 1.

Michael is single, age 15, and not blind. His parents can claim him as a dependent on their tax return. He has taxable interest income of $800 and wages of $150. He enters $400 (his earned income plus $250) on line 1 of Table 2. On line 3, he enters $800, the larger of $400 or $800. Michael enters $4,850 on line 4. On line 5a, he enters $800, the smaller of $800 or $4,850. His standard deduction is $800.

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Example 2.

Judy, a full-time student, is single, age 22, and not blind. Her parents can claim her as a dependent on their tax return. She has dividend income of $275 and wages of $2,500. She enters $2,750 (her earned income plus $250) on line 1 of Table 2. On line 3, she enters $2,750, the larger of $2,750 or $800. She enters $4,850 on line 4. On line 5a, she enters $2,750 (the smaller of $2,750 or $4,850) as her standard deduction.

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Example 3.

Amy, who is single, is claimed as a dependent on her parents' tax return. She is 18 and blind. She has taxable interest income of $1,000 and wages of $2,000. She enters $2,250 (her earned income plus $250) on line 1 of Table 2. She enters $2,250 (the larger of $2,250 or $800) on line 3, $4,850 on line 4, and $2,250 (the smaller of $2,250 or $4,850) on line 5a. Because Amy is blind, she checks the box for blindness and enters "1" in box c at the top of Table 2. She enters $1,200 (the number in box c times $1,200) on line 5b. Her standard deduction on line 5c is $3,450 ($2,250 + $1,200).

Taxmap/pubs/p929-004.htm#TXMP3a35c45a Standard Deduction   of Zero

Standard Deduction

The standard deduction for the following dependents is zero.

1. A married dependent filing a separate return whose spouse itemizes deductions.
2. A dependent who files a return for a period of less than 12 months due to a change in his or her annual accounting period.
3. A nonresident or dual-status alien dependent, unless the dependent is married to a U.S. citizen or resident at the end of the year and chooses to be treated as a U.S. resident for the year. See Publication 519, U.S. Tax Guide for Aliens, for information on making this choice.

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Example.

Jennifer, who is a dependent of her parents, is entitled to file a joint return with her husband. However, her husband elects to file a separate return and itemize his deductions. Because he itemizes, Jennifer's standard deduction on her return is zero. She can, however, itemize any of her allowable deductions.

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