Tax filing: the standard deductions for 2015
Tax deductions are subtracted from your gross income, and the IRS will give toy the standard deduction even if you have no other qualifying deductions or credits, no questions asked.
Even if you have no other qualifying deductions or tax credits, the IRS gives you the standard deduction on a no-questions-asked basis. The amount is subtracted from your gross income. Along with your other exemptions, it lowers the amount of income you have to pay taxes on.
If you’re using the simplest approach to filing taxes, the Form 1040EZ, you have to use the standard deduction; you don’t have the option to itemize. If you use the longer Form 1040, you have a choice between taking the uniform standard deduction or itemizing your own customized deductions.
Using the standard deduction means you lose the ability to claim home mortgage interest and other itemized tax deductions — medical expenses or charitable donations, for example. But if you don’t itemize, you don’t have to hang on to records supporting your deductions in case the IRS decides to audit you.
The 2015 standard deduction amounts:
Married filing jointly: $12,600
Married filing separately: $6,300
Head of household: $9,250
Qualifying widow(er): $12,600
Taxpayers who are blind or aged 65 or older get a higher amount for the standard deduction.
When to claim the standard deduction
Although using the standard deduction is easier than itemizing, if you have a mortgage or home equity loan it’s worth running basic calculations to see if itemizing would save you money. Use the numbers you find on Form 1098, the Mortgage Interest Statement. Your home lender mails the Form 1098 statement to you in January.
Compare your home interest deduction amount to the standard deduction plus dependent deductions. When you do your taxes online, most preparers will calculate your taxes both ways to see which offers a lower tax bill.
And keep in mind that property taxes, state income taxes or sales taxes, charitable donations and losses from thefts or disasters are deductible, too, if you itemize.
This article first appeared in NerdWallet.
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