By Norma Wahnon
Copyright 2012 Norma Wahnon
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Taxpayers can opt for the method of deduction that lowers their tax liability. Taxpayers can opt for the standard deduction or they can choose to itemize deductions.
The standard deduction is a dollar amount that depends on the taxpayer’s filing status. It is actualized periodically, by law. The standard deduction reduces the amount of a taxpayer’s taxable income and taxpayers can opt for it when it is higher than the total allowed itemized deductions, such as medical expenses, charitable contributions, and some taxes reported in Form 1040A. The standard deduction is higher for taxpayers who are:
– Age 65 or older; or
– Blind; or
– For 2011, had a net disaster loss from a disaster that occurred in 2008 or 2009 but the loss did not become deductible until 2011; the standard deduction is increased by the net disaster loss (Form 4684).
Persons who must itemize and cannot take the standard deduction:
– Married taxpayers filing separately, where one spouse itemizes deductions;