A standard tax deduction is the most useful ways to reduce taxable income and save for a year. This require study and planning strategy.
Understanding the Standard Tax Deduction
Reducing your tax burden is to claim for the tax deduction. There are two types of deduction. Itemized deductions and standard tax deduction. You can reduce the burden by itemizing the tax deduction. Itemize deduction is the entry of all the spending which you can list in return filing form. They can change according to many circumstances like work, filing status, government laws, tax deduction, and tax rate.
Standard tax deduction is simply the uniform amount which is used to reduce tax accountability. It does not need an itemize deduction. Basically any form of taxation can be used to reduce amount of taxation.
IRS Filing Status Groups
This is the standard taxation. It can be different according to status of your filing. Filing of tax deduction can depend upon the status of filing. Single, status is for the people who are not in relation a divorce, widow or anybody with single status. Married but filing the tax return separately. Married or filing as a couple together. head of family or a widow. Some more conditions to fit in are you must not be married till last date. You have paid more expenses to work the household properly. Dependent must have spent half year with you. Widow can claim for two years. New reforms are made in the process of tax deduction which result in difference in amount also.
Standard Deduction Amounts
Standard taxation consist of jobs acts and laws, there are changing laws in 2017 according to them standard tax deduction is
- $9,350 for the head of household, $12,700 for married couples filing jointly, $6,350 for married couples filing separately and single filers
In the changed law, the standard tax deduction is twice:
- $12,000 for married couples filing separately as single taxpayers
- $24,000 for married couples filing jointly and qualifying widow
- $18,000 for the head of household
Anyone over 65 years with vision disability receives $1600 as single $24, 00 when filing jointly. When you have dependents of income you should claim for them
Other Changes from the New Tax Law
Major changes are made in the tax deduction of:
- No Personal Exemption: You can claim $4050 on each independent.
- Caps on State and Local Tax (SALT) Deductions: People in big cities can have relief on some taxes. The new limit $10,000.
- Limits on Home Mortgage and Equity Interest: The new limit lowered the amount of through tax deduction.
- Tax deduction needs proper planning one can consult a professional to overcome these difficulties.
- Mortgage, it is decreased from $1,000,000 to $750,000. This is also relating to combined loans used to build, buy, and improve the first and second homes.
Natural Disaster Deductions: Some of damaged caused in natural disaster can be claim back.