advertisement
Every year, the Internal Revenue Service adjusts the standard deduction to account for inflation. This is the basic deduction that 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 for the year, then, by all means, itemize. It will save you money.
Generally, homeowners who pay interest on mortgages and substantial property taxes are able to itemize their deductions.
If your deductions don't exceed the standard deduction, then don't itemize.
In 2008 and 2009, taxpayers who don't itemize their deductions but pay real estate taxes can take a larger standard deduction.
The deduction is equal to the amount of real estate taxes paid up to $500 for single taxpayers and $1,000 for joint filers.
For more information on standard deductions, check IRS Publication 17: Your Federal Income Tax (.pdf file) and Publication 501: Exemptions, Standard Deduction and Filing Information (.pdf file).
Here are the 2008 and 2009 standard deductions.
| Filling status | Amount |
|---|---|
| Married filling jointly or qualifying widow(er) | $10,900 |
| Head of household | $8,000 |
| Single | $5,450 |
| Married filling separately | $5,450 |
Here are the 2009 standard deductions
| Filling status | Amount |
|---|---|
| Married filling jointly or qualifying widow(er) | $11,400 |
| Head of household | $8,350 |
| Single | $5,700 |
| Married filling separately | $5,700 |
Updated Dec. 10, 2008
Rate this Article
High
