Increase Your Tax Deductions
Taxable income is another key element in your overall tax situation. Taxable income is what's left over after you have reduced your AGI by your deductions and exemptions. Almost everyone can take a standard deduction, and some people are able to itemize their deductions. The amount of your standard deduction and personal exemptions depends on your filing status and how many dependents you have. The standard deduction increases for married persons filing jointly, and for those qualified as Head of Household. The more dependents you have, the more personal exemptions you are entitled to take. The best strategy for reducing your taxable income is to itemize your deductions, and the three biggest deductions are mortgage interest, state taxes paid, and gifts to charity.
- Standard Deductions for 2010:
- Single (S)- $5,700
- Married Filing Jointly(MFJ) - $11,400
- Head of Household (HH) - $8,400
- Qualified Widower (QW) - $11,400
- Married Filing Separately (MFS) - $5,700
- Additional Amount if age 65 or older, or Blind - $1,100
(For MFJ, MFS, or QW) - Additional Amount if age 65 or older, or Blind - $1,400
(For S & HH)
- Personal Exemptions for 2010:
- Per Taxpayer and each Dependents - $3,650