June 20, 2008, Newsletter Issue #121: 2005 Standard Deductions for Married Couples

Tip of the Week

Until 2003, married couples were actually penalized if they filed jointly. Known as the “marriage penalty,” married couples actually ended up paying higher taxes than if they filed as singles. Some incentive to get married, huh? The marriage penalty exclusion has been extended until 2010. For tax year 2005, the standard deduction if filing married-joint is $10,000. If you file married-single, your standard deduction is $5,000. Before you decide to claim the standard deduction, however, familiarize yourself with what expenses you may have that qualify as personal tax deductions. Generally speaking, if your itemized federal tax deductions exceed the standard deduction, you'll benefit from a tax cut—and that's money in your pocket.

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