Thursday - February 19, 2009

When the ‘Standard Deduction’ is no longer ‘Standard’

Today I finally broke down and did my tax returns, Federal and State. And I found that the ‘standard deduction’ isn’t… uh… standard anymore.

Thought I would bring this to your attention. Just in case I’m entirely crazy, maybe some BMEWS’d accountant would set me straight. Before I file a false return…

A little background: I’ve always done my own taxes since my parents cut me lose as a college freshman in ‘78. And indeed, I’ve screwed up before and paid dearly. Not that the tax owed was too onerous, but the penalties and interest after three years? (which is how long the IRS took to catch my oversight) Whew!

I used to be able to itemize deductions. This was back when the youngest child was still at home. He moved out on his own in ‘94. Since then, while I always check, the standard deduction has been better. (I’d like to thank Ronald Reagan. He indexed the tax tables to inflation. Though I’m now getting too close to the Alternative Minimum Tax, which I also check every year. The AMT has NEVER been indexed for inflation.)

For those that don’t know, you can take the ‘standard deduction’, which differs for single, married, qualified widow(er)s, etc. Or you can ‘itemize’ if that is more beneficial. When itemizing, you can deduct things like mortgage interest, property taxes, other state and local taxes, union dues, healthcare costs that exceed a certain floor, etc. The point is that the ‘itemized deductions’ should exceed the ‘standard deduction’. Otherwise, what’s the point? You have to keep records of expenditures… etc.

The standard deduction, I’ve always assumed, included all of the above. Just makes things easier.

There’s a new line on my 1040: Line 39c says,

Check if standard deduction includes real estate taxes or disaster loss (see page 34)

Huh? What is this? I’ve paid attention to these things since I took that H&R Block tax course back in ‘87. Of course I turned to page 34. There’s a worksheet to fill out…

The bottom line is this: The ‘standard deduction’ is no longer standard. You can now add a portion of your property taxes paid during the last year ($500 if single, $1000 if married filing jointly) to the so-called ‘standard deduction’. Remember what I stated above: The standard deduction assumes a certain amount of property taxes. This is supposed to make things simpler.

Now I have a worksheet to find out what my ‘standard deduction’ is.

I benefited this time around. Instead of the normal $400-$500 I usually owe in April, this year I owe a whopping $45 and some change.

I’m not really complaining about the result this year. But, I’m sure some Democrats will try to raise taxes on ‘the rich’ like me. They’ll say I ‘only paid’ $45.00 last year. And their idiot constituency will believe it!

Remember, What Congress giveth, B. Hussein Obama can taketh away… with interest!

Posted by Christopher     on 02/19/2009 at 07:29 PM   
Filed Under: • Democrats-Liberals-Moonbat Leftists • Taxes •  
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