Updated: Nov 30, 2019
Taxpayers who do not itemize their deductions on Schedule A of Form 1040 can take advantage of the standard deduction. The standard deduction amount depends on the taxpayer’s filing status. As you can see from the chart, in the tax year 2019, all filing statuses benefit from a higher standard deduction due to adjustment for inflation. Due to TCJA, the standard deduction rose sharply in 2018, but exemptions were eliminated. In some cases, due to the elimination of exemptions after 2017, the higher standard deduction may not benefit the taxpayer.
For example, a Married Filing Jointly taxpayer with two dependents would have the following standard deduction and exemptions in 2017 versus 2019. Lower tax brackets and the expanded child tax credit is meant to offset these changes to the standard deduction and exemptions.
The standard deduction is composed of two parts – the basic standard deduction and the additional standard deduction.
New Standard Deduction Amounts
In the case of Married Filing Separately if one spouse itemizes, the other spouse must also itemize and may not take the standard deduction. So, for Married Filing Separate taxpayers, the standard deduction is zero if his/her spouse itemizes deductions regardless of whether his/her standard deduction will be greater than the itemized deductions.
Additional Standard Deduction for Age 65 or Over and/or Blind
The additional standard deduction for Married Filing Jointly, Qualifying Widow(er) with Dependent Child, and Married Filing Separately individuals is $1,300. If the filing status is Single or Head of Household, the additional standard deduction amount is $1,650. Taxpayers who were born on January 1, 1955, are considered to be age 65 at the end of 2019.
Amanda is 81-years old and blind. Jim is 84-years old. They are married and filing jointly. Their standard deduction amount is the basic standard deduction plus three additional amounts which is: $24,400 + 3 × $1,300 = $28,300.
Dependent Standard Deduction
The dependent standard deduction for the tax year 2019 is $1,050 for a dependent with unearned income only. For a dependent who has both earned and unearned income, the standard deduction is the greater of $1,050 or the dependent’s earned income plus $350, but not more than the standard deduction for the dependent’s filing status.