What is the Standard Deduction?
The standard deduction is a specific dollar amount that reduces the amount of income on which you’re taxed. Your standard deduction consists of the sum of the basic standard deduction and any additional standard deductions for age and/or blindness. In general, the standard deduction is adjusted each year for inflation and varies according to your filing status, whether you’re 65 or older and/or blind, and whether another taxpayer can claim you as a dependent. The standard deduction may not be available to certain taxpayers. You cannot take the standard deduction if you itemize your deductions. For the 2016 tax year, the standard deduction amounts are:
- $9,400 for heads of household
- $6,300 for singles and married persons filing separate
- $12,600 for married couples filing jointly
- Note the above amounts are before any phase
Additional Standard Deduction
You’re allowed an additional deduction if you’re age 65 or older at the end of the tax year. You’re considered to be 65 on the day before your 65th birthday. You’re allowed an additional deduction for blindness if you’re blind on the last day of the tax year. For example, a single taxpayer who is age 65 and blind would be entitled to a basic standard deduction and an additional standard deduction equal to the sum of the additional amounts for both age and blindness. If you or your spouse were age 65 or older or blind at the end of the year, be sure to claim an additional standard deduction by checking the appropriate boxes for age or blindness on Form 1040A (PDF) or Form 1040 (PDF), U.S. Individual Income Tax Return. You may not use Form 1040EZ (PDF), Income Tax Return for Single and Joint Filers with No Dependents, to claim an additional standard deduction.
If you can be claimed as a dependent by another taxpayer, your standard deduction for 2016 is limited to the greater of: (1) $1,050, or (2) your earned income plus $350 (but the total can’t be more than the basic standard deduction for your filing status).
Eligibility of the Standard Deduction
Certain taxpayers aren’t entitled to the standard deduction:
- A married individual filing as married filing separately whose spouse itemizes deductions
- An individual who was a nonresident alien or dual status alien during any part of the year (see below for certain exceptions)
- An individual who files a return for a period of less than 12 months due to a change in his or her annual accounting period
- An estate or trust, common trust fund, or partnership
However, certain individuals who were nonresident aliens or dual status aliens during any part of the year may take the standard deduction in the following cases:
- A nonresident alien who is married to a U.S. citizen or resident alien at the end of the tax year and makes a joint election with his or her spouse to be treated as a U.S. resident for the entire tax year;
- A nonresident alien at the beginning of the tax year who is a U.S. citizen or resident by the end of the tax year, is married to a U.S. citizen or resident at the end of such tax year, and makes a joint election with his or her spouse to be treated as a U.S. resident for the entire tax year; and
- Certain residents of India covered by paragraph 2 of Article 21 (Payments Received by Students and Apprentices) of the United States-India Income Tax Treaty.
If you have further inquiries about the standard deduction or other U.S. tax filing questions living overseas, please contact us and we will let you know what solutions are available. You may also find more valuable information on the IRS’s updated website here: https://www.irs.gov/newsroom/in-2016-some-tax-benefits-increase-slightly-due-to-inflation-adjustments-others-are-unchanged