27
2011
Changes to 2012 Tax Season, Standard Deduction Increase
Have you ever wondered how your tax preparer comes up with the end result of the taxes owed or refund due on your tax return? Well, one very important factor is the Standard Deduction or Itemized Deductions. All taxpayers have the option of either taking the standard deduction or itemizing their receipts on their tax return. If you itemize it’s because you paid out real estate taxes, property taxes, medical & dental expenses, and a few other items out of pocket and the total amount is greater than the standard deduction. Regardless of which option you choose (standard or itemized deduction), this deduction will reduce the amount of income on which you are taxed. That’s just great!!!
Every year, inflation adjustments are made to various tax-related items. One of those items is the standard deduction and Itemized deductions. Below are the details for the Standard deductions for Non-dependents during 2011.
| Filing Status | Amount ($) |
| Single (S) | 5,800 |
| Age 65 and older, add | 1,450 |
| Blind, add | 1,450 |
| Head of Household (HH) | 8,500 |
| Age 65 and older, add | 1,450 |
| Blind, add | 1,450 |
| Qualifying Widow(er)(QW) | 11,600 |
| Age 65 and older, add | 1,150 |
| Blind, add | 1,150 |
| Married Filing Jointly (MFJ) | 11,600 |
| Age 65 and older, add | 1,150 |
| Blind, add | 1,150 |
| Married Filing Separately (MFS) | 5,800 |
| Age 65 and older, add | 1,150 |
| Blind, add | 1,150 |
Itemized Deduction - 2011
In 2011, there is no limit placed on total itemized deductions. In other words, the phaseout of itemized deductions based on Adjusted Gross Income does not apply. So if you itemize, gather up all your receipts and include everything you possibly can, that will knock off a lot off of your taxable income.
Personal and Dependent Exemptions
If you have children, husband, brother, sister, mom or dad that lived with you all year, in most cases you can include them in your income taxes, even if you don’t get any credits for that individual, you can get their exemption. What is this you wonder? Exemptions also reduce your taxable income. You can deduct $3,700 for each exemption you claim in 2011.
If you are entitled to two exemptions for 2011, you can deduct $7,400 ($3,700 x 2).
Types of exemptions
There are two types of exemptions you may be able to take:
- Personal exemptions for yourself and your spouse, and
- Exemptions for dependents (children, mom, dad, brother, sister, etc.)
| $38,600 (2011 joint income) |
| - $11,600 (MFJ filing status - Standard deduction) |
| $27,000 |
| - $14,800 (exemptions - $3,700 x 4 people = $14,800) |
| $12,200 = Taxable Income |
Featured image provided by:
spruceupyourfinances.com
