Most taxpayers have a choice of either taking a standard deduction or itemizing their deductions. The standard deduction is a dollar amount that reduces the amount of income on which you are taxed. It is a benefit that eliminates the need for many taxpayers to itemize actual deductions, such as medical expenses, charitable contributions, and taxes, on Schedule A of Form 1040. The standard deduction is higher for taxpayers who are 65 or older or blind. If you have a choice, you can use the method that gives you the lower tax.
2004 Standard Deduction
Single or Married filing separately - $4,850
Married filing jointly or Qualifying
widow(er) with dependent child - $9,700
Head of household - $7,150
Please note: If you or your spouse are over 65 and/or blind, your Standard Deduction will be higher. See IRS Publication 501 for details.
Persons not eligible for the standard deduction.
Your standard deduction is zero and you should itemize any deductions you have if:
1. You are married, filing a separate return, and your spouse itemizes deductions,
2. You are filing a tax return for a short tax year because of a change in your annual accounting period, or
3. You are a nonresident or dual-status alien during the year. You are considered a dual-status alien if you were both a nonresident and resident alien during the year.
If you are a nonresident alien who is married to a U.S. citizen or resident at the end of the year, you can choose to be treated as a U.S. resident. (See Publication 519.) If you make this choice, you can take the standard deduction.
