2012 Standard Deduction Amount & What It Means
The vast majority of people subject to filing a federal income tax form with the United States Internal Revenue Service are entitled to what is known as a standard deduction. What is it and how does it work?
The Standard Deduction
The standard deduction (SD) is the amount you are allowed to directly subtract from your annual earnings that are subject to federal tax
Standard Deductions and Filing Statuses
Exactly how much you are allowed to claim as a SD varies and the specific amount is mostly dependent on your personal tax filing status. The IRS recognizes six different filing status categories for the purposes of determining the value of a SD.
- Single (unmarried or legally separated): $5,950
- Head of Household: $8,700
- Married, Filing Jointly: $11,900
- Married, Filing Separately: $5,950
- Qualifying Widow or Widower, With Dependent Child:
- Dependent: $950-$5,950 (the exact amount for the standard deduction for dependents is variable depending on the income, if any, earned by the dependent; the upper limit cannot exceed the SD that applies to the filing status of the dependent, or $5,950—the SD for a Single filer)
There are a couple of other considerations that apply to determining the value of your SD.