Most taxpayers have a choice of either taking a standard deduction or itemizing their deductions.

Persons not eligible for the standard deduction. Your standard deduction is zero and you should itemize any deductions you have if:

1. You are married and filing a separate return, and your spouse itemizes deductions,
2. You are filing a tax return for a short tax year because of a change in your annual accounting period, or
3. You are a nonresident or dual-status alien during the year. You are considered a dual-status alien if you were both a nonresident and resident alien during the year.

   Note. If you are a nonresident alien who is married to a U.S. citizen or resident at the end of the year, you can choose to be treated as a U.S. resident. (See Publication 519, U.S. Tax Guide for Aliens.) If you make this choice, you can take the standard deduction.

If an exemption for you can be claimed on another person's return (such as your parents' return), your standard deduction may be limited. See Standard Deduction for Dependents, later.

Standard Deduction Amount

The standard deduction amounts for most taxpayers are shown in Table 21-1.

The amount of the standard deduction for a decedent's final return is the same as it would have been had the decedent continued to live. However, if the decedent was not 65 or older at the time of death, the higher standard deduction for age cannot be claimed.

Higher Standard Deduction for Age (65 or Older)

If you do not itemize deductions, you are entitled to a higher standard deduction if you are age 65 or older at the end of the year. You are considered 65 on the day before your 65th birthday. Therefore, you can take a higher standard deduction for 1998 if your 65th birthday was on or before January 1, 1999.

Use Table 21-2 to figure the standard deduction amount.

Higher Standard Deduction for Blindness

If you are blind on the last day of the year and you do not itemize deductions, you are entitled to a higher standard deduction as shown in Table 21-2. You qualify for this benefit if you are totally or partly blind.

Partly blind. If you are partly blind, get a certified statement from an eye physician or registered optometrist that:

1. You cannot see better than 20/200 in the better eye with glasses or contact lenses, or
2. Your field of vision is not more than 20 degrees.

If your eye condition will never improve beyond these limits, the examining eye physician must include this fact in the certification. You should keep the certification in your records.

If your vision can be corrected beyond these limits only by contact lenses that you can wear only briefly because of pain, infection, or ulcers, you can take the higher standard deduction for blindness if you otherwise qualify.

Spouse 65 or Older or Blind

You can take the higher standard deduction if your spouse is age 65 or older or blind and:

1. You file a joint return, or
2. You file a separate return, your spouse had no gross income, and an exemption for your spouse could not be claimed by another taxpayer.

You cannot claim the higher standard deduction for an individual, other than your spouse, for whom you can claim an exemption.

Examples

The following examples illustrate how to determine your standard deduction using Tables 21-1 and 21-2

Example 1. Larry, 46, and Donna, 33, are filing a joint return for 1998. Neither is blind. They decide not to itemize their deductions. They use Table 21-1. Their standard deduction is $7,100.

Example 2. Assume the same facts as in Example 1, except that Larry is blind at the end of 1998. Larry and Donna use Table 21-2. Their standard deduction is $7,950.

Example 3. Bill and Terry are filing a joint return for 1998. Both are over age 65. Neither is blind. If they do not itemize deductions, they use Table 21-2. Their standard deduction is $8,800.

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