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Every year, the Internal Revenue Service adjusts the standard deduction to account for inflation. This is the basic deduction all taxpayers get.
But don't just take the standard deduction. Total up all your deductions every year. If the total of your itemized deductions exceeds the standard deduction, then, by all means, itemize. It will save you money.
If your deductions don't exceed the standard deduction, then don't itemize.
Here are the standard deductions for 2006 and 2007.
| Filling status | Amount |
|---|---|
Married filling jointly or qualifying widow(er) | $10,300 |
Heads of households | $7,550 |
Singles | $5,150 |
Married filling separately | $5,150 |
- If you're 65 or blind: An additional $1,000 standard deduction may be claimed by a married taxpayer who is at least 65 years old or blind. If the taxpayer is single, the additional standard deduction amount is $1,250.
- If you're 65 AND blind: A married taxpayer can claim a second $1,000 standard deduction -- for a total of $2,000. If the taxpayer is single, he can claim a second $1,250 standard deduction -- for a total of $2,500.
| Filling status | Amount |
|---|---|
Married filling jointly or qualifying widow(er) | $10,700 |
Heads of households | $7,850 |
Singles | $5,350 |
Married filling separately | $5,350 |
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