The federal stimulus bill contains many tax-related provisions to help people make ends meet during the recession, including a higher standard deduction for people who do not itemize.
According to the IRS, the standard deduction is higher for many taxpayers this year than it was in the 2008 filing season. Along with an annual increase in the standard deduction, taxpayers will also be allowed to deduct qualified real estate taxes, state or local sales tax on new vehicle purchases after February 16, 2009, and net disaster losses in a federally declared disaster area.
The IRS goes on to report that the standard deduction varies according to one's filing status and in some cases, things like one's age or a visual disability. State and local real estate taxes can be added to the deduction for up to $500 for individuals and $1,000 for those who file jointly.
Also, certain taxpayers will find that they are not eligible for the standard deduction, reports the IRS.
For example, a married person whose spouse itemizes deductions but files a separate return would fall into this category, as would an individual who was a nonresident alien or who held dual citizenship status for part of the year. The IRS also cites a couple of other situations on its Web site where a person would not be eligible for the standard deduction.
Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.