How to Pick Type of Deductions on a 1040-ES

Tax form 1040 ES is the form taxpayers who are not subject to withholding tax must fill out at tax time. As with many other Internal Revenue Service forms, you can choose to take the standard deductions or you may decide to itemize. Which one you choose depends on your situation—read on to learn how to decide.

Difficulty: Moderately Challenging

Instructions

1. Determine if you want to file jointly with your spouse or not. If you are filing a joint return, your standard deduction in 2008 is $10,900.

2. Decide if you are filing as the head of a household. Heads of household can claim $8,000 as a standard deduction on form 1040 ES for the 2008 tax year.

3. Ascertain whether or not you will file as a single individual or married filing separately. If you are married and filing a separate return or if you're single, in 2008 you're entitled to a deduction of $5,540, exactly half the amount of a married couple filing jointly.

4. Confirm your status as a dependent. If someone else can claim you as a dependent on their tax return, then your deductions are limited to the greater of either $900 or the combination of your itemized deductions plus your credits. See IRS publication 505 for more information regarding available tax credits for form 1040-ES.

Tips & Warnings

• Depending on your situation, it might be to your benefit to use itemized deductions when you file form 1040 ES. Itemized deductions allow for items such as mileage reimbursement (which ranges from 14 cents per mile to 50.5 cents per mile) and dependent child credit. Filing form 1040 ES using the standard deduction may save time and effort but might not save you money.