Tax 2004: Itemizing

Many of you need advice on whether to itemize or to take the standard deduction. Itemizers use Schedule A of Form 1040 to write off outlays like real estate taxes and mortgage interest. The standard deduction on Form 1040's line 37 is the amount automatically available without having to itemize.

Just how much is your standard deduction for tax year 2003?

It all depends. The allowable amount is based mostly on your filing status (the category you fall into as a filer, such as married filing jointly, married filing separately, single or head of household) and age.

The normal standard deduction amounts are $4,750 for an individual with the filing status of single and $7,000 for a head of household. They are $9,500 for married couples filing jointly or $4,750 if they file separately. The law requires couples filing separately to handle their deductions the same way; if one spouse itemizes, so must the other.

An often-missed break: The $9,500 deduction is also available to someone qualifying as a "surviving spouse" — IRS lingo for a widow or widower who has a dependent child and is entitled to use joint-return rates for two years after the death of a spouse in 2001 or 2002.

Deductions are higher for individuals who have attained age 65 by 2003's close. They increase by $950 for a married person (whether filing jointly, separately or as a surviv­ing spouse) and $1,150 for an unmarried person. Individuals considered blind also are entitled to the additional $950 or $1,150 and more if they are both 65 and blind.

Some examples: The deduction rises from $4,750 to $5,900 for a single person who is age 65 or older, and from $4,750 to $7,050 for a single person who is at least 65 and blind. On a joint return, depending on whether one or both spouses are at least 65, it rises from $9,500 to either $10,450 or $11,400.