How to Calculate Federal Tax Deduction
The Federal Tax Deduction is more commonly referred to as the standard deduction. Each year when filing taxes, the government allows people to deduct a certain amount from their taxes. To take the standard deduction, the taxpayer cannot itemize deductions. The standard deduction changes each year, but the method to determine the deduction usually remains the same. The Internal Revenue Service bases the standard deduction on the taxpayer's filing status.
Other People Are Reading
Instructions
-
-
1
Determine that you are allowed to take the deduction. People who are not allowed the standard deduction include those who file "married, filing separately" while their spouse itemizes; a nonresident alien or an alien with dual status at any time during the year; a part-year tax return filer; or an estate trust, common trust fund or partnership.
-
2
Determine you filing status. The filing statuses are single; married, filing separately; married, filing jointly; qualifying widow; or head of household.
-
-
3
Determine your standard deduction based on filing status. The deduction for single and married filing separately is $5700. The deduction for married filing jointly and for qualifying widow is $11,400. The deduction for head of household is $8350. For example, a couple filing jointly would claim $11,400. (See reference 2, page 47.)
-
4
Answer whether you or your spouse was born before January 1, 1945, or if either of you are blind. Add $1,100 for each occurrence, or $1,400 if you are filing as head of household. In our example, if you are born before January 1, 1945, but your wife was not, and your wife is blind, but you are not, then multiply $1,100 x two, which equals a deduction of $2,200. (See reference 2, page 37.)
-
5
Add the deduction calculated in step 3 to the deduction calculated in step 4 to determine the total deduction. In our example, $11,400 plus $2,200 equals a total deduction of $13,600.
-
1
References
- Photo Credit tax forms image by Chad McDermott from Fotolia.com
