2012 Tax Deduction Amounts

By Kay BellBankrate.com

Most taxpayers claim the standard deduction amount. The amounts are adjusted each tax year for inflation.

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For 2012, the standard deduction for taxpayers younger than 65

Standard Deductions for Older, Visually Impaired Taxpayers

Taxpayers who are 65 or older, or who are blind, receive larger standard deduction amounts. Each is noted via a checkbox on Form 1040 and Form 1040A. The age and vision of each spouse is counted separately, meaning that an older couple could check up to four boxes. The final box count is used to figure the adjusted standard deduction amount.

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    For 2012, the standard deduction for taxpayers older than 65 and/or visually impaired

    For standard deduction amount purposes, if your 65th birthday was Jan. 1, the Internal Revenue Service considers you age 65 for the previous tax year and you may claim the larger standard deduction.

    As for vision considerations, you may qualify for the larger deduction even if you are partially blind by attaching a letter from your physician attesting to your limited vision.

    Standard Deductions for Dependent Taxpayers

    Sometimes you might file a return, for example, to get a refund of withheld money, even though you can be claimed as a dependent on someone else's return.

    In this case, a dependent taxpayer who is younger than 65 and not blind can take as a standard deduction the greater of $950 or his or her earned income plus $300. This deduction amount, however, cannot exceed the basic standard deductions for the dependent taxpayer's filing status.

    Itemized Deductions

    Although most taxpayers claim the standard deduction, all taxpayers may choose to itemize deductions and claim that amount if it is larger than their allowable standard deduction amount.

    You must file Form 1040 and Schedule A to itemize.

    Some itemized deductions are limited based on a taxpayer's adjusted gross income, or AGI. Others are restricted to a threshold, or percentage, of the filer's adjusted gross income.

    Limits on itemized deductions

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