June 13, 2008, Newsletter Issue #120: 2005 Standard Deductions for Individuals

Tip of the Week

There are two main variations on the filing status for individuals. You can file single filing status or head of household. To file under head of household status, you have to be unmarried and have paid more than half of the cost to maintain a home for yourself and your claimed dependents or another qualifying person. The 2005 standard deduction for the head of household filing status is $7,300. To file single, you must be unmarried, divorced, or legally separated. The 2005 standard deduction for single filers is $5,000. Before you decide to claim the standard deduction, however, you should familiarize yourself with items you may claim as personal tax deductions to see if you could get a tax cut by itemizing. Generally speaking, if your itemized federal tax deductions exceed the standard deduction, your taxes will be lower—and that's like money in your pocket.

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