Tuesday, June 25, 2013

2013 Standard Tax Deductions

Each year you are eligible to reduce your taxable income by the amount of your qualified tax deductions.  You can do this by either focusing on itemized deductions or a standard deduction. 

Both of these amounts are combined with your personal exemptions and are used to calculate your adjusted gross income which is the amount you will be taxed for each year.

Your standard deduction amount is calculated by a variety of denominators including your filing status, age, and if you are blind you are eligible for an increased standard deduction.  The standard deduction amount varies from year to year, but here are the amounts for tax year 2013:
  • Single $6,100 
  •  Head of Household $8,950 
  •  Married Joint Filing $12,200 
  •  Married Individual Filing $6,100
·         Qualified Widow/Widower $12,200
·         Dependent $1,000-$6,100

These deductions amounts have significantly increased over the past 4 years and the information below needs to be taken into consideration when filing your taxes. 

Married But Filing Individually

You would file individually if you are married for a few reasons such as separation or you were married during the tax year and someone else can claim you as a dependent for the year. 

Even if you are filing separately you must file the same type of returns.  For example if your spouse is filing itemized deductions you may not file a standard deduction.  If you are not sure which way is the most beneficial calculating both filing figures (itemized and standard) to see which will give you the most tax savings.

Dependents Standard Deduction Amount

As you may have noticed the deduction amount for dependents has a wide range.  In tax year 2013 you calculate dependents by the greater of two calculations:

$1,000

OR

The dependents earned income plus $350, which may not exceed the standard deduction amount.

These amounts increased by $50 from 2012.

Standard Deduction For Age or Blindness

If you are over the age of 65 or qualified as legally blind you can receive an additional standard deduction.  You calculate this amount by adding it to your regular standard deduction.  The deduction is a flat rate of either:

Single or Head of House Hold            $1,500
For all other filing status a flat rate of $1,200

This amount has also increased by $50 for tax year 2012.

If you need assistance determining your filing status or which deductions are most beneficial, visit TurboTax online for 2014 and learn how to maximize your deductions and get the largest tax refund possible.