It’s my annual “Taxes from A to Z” series! For the series, I’ll focus on terms that you might see on your tax forms and statements but not necessarily in the headlines. If you’re wondering whether you can claim wardrobe expenses or whether to deduct a capital loss, this is one series you won’t want to miss.
H is for Higher Standard Deduction.
Two-thirds* of all taxpayers will claim the standard deduction. That’s the case despite the fact that we hear so much about itemized deductions (including the home mortgage interest deduction and the charitable deduction). The reality is, however, that most taxpayers don’t itemize for one simple reason: the standard deduction for their filing status exceeds their total itemized deductions on Schedule A.
(*NOTE: Post-TJCA, the number is closer to 90%.)
Those are the numbers for most taxpayers. There is, however, an exception. If you are blind or age 65 or older at the end of the year, you are entitled to a higher standard deduction.
If you aren’t totally blind, in order to qualify for the higher standard deduction you must get a certified statement from an eye doctor that you can’t see better than 20/200 with glasses or contact lenses, or your field of vision is 20 degrees or less. The more documentation regarding your condition, the better and, of course, you’ll want to keep good records.
If you aren’t yet age 65, you can still claim the higher standard deduction if your spouse is age 65 or older or blind and you file a joint return, or you file a separate return and can claim an exemption for your spouse because your spouse had no gross income and can’t be claimed as a dependent by another taxpayer. If your spouse died in 2015 before reaching age 65, you can’t take a higher standard deduction because of your spouse (you can, however, claim the deduction for yourself if you were age 65). For purposes of the standard deduction, you’re considered to reach age 65 on the day before your 65th birthday.
You can combine additional standard deduction amounts. For example, if you are age 65 and blind, you would be entitled to the additional amounts for age and blindness. Your higher standard deduction would be the sum of the standard deduction and the additional amounts for both age and blindness.
If you’re not sure whether to claim the standard deduction or the itemized deduction, and the math in your head makes it seem too close to call, run the numbers and see which is the most beneficial.