Most taxpayers claim the standard deduction. One of the great things about using this amount, which is based on your filing status, is that you don't have to hassle with extra paperwork.
That's about to change. Thanks to new laws that allow add-ons to the standard deduction amount, millions of taxpayers now will have to substantiate their deductible supplements.
Starting with 2009 returns, the IRS is requiring these standard deduction claimants to fill out a new piece of paperwork, Schedule L, and send it along with Form 1040 or 1040A.
As the schedule notes (or "cautions") in the line just below where you enter your name and Social Security Number, "File this form only if you are increasing your standard deduction by certain state or local real estate taxes, new motor vehicle taxes, or a net disaster loss."
Last filing season, additional standard deduction amounts for disaster losses and property taxes (the car tax write-off is new in 2009) were figured using the standard deduction worksheet found in the Form 1040 instruction book. A similar worksheet was provided in the 1040A instructions for filers using that return and only adding property tax payments to their standard deduction. But in both cases, the IRS didn't demand to see the work product.
Next filing season, however, Uncle Sam wants the additional deduction details in writing on the new Schedule L.
How much you can add: In each of the three add-on instances now available, you start with 2009's standard deduction amounts:
$5,700 if you're single or married filing separately
$11,400 if you're married filing jointly or are a qualifying widow or widower
$8,350 if you're a head of household
To the appropriate standard deduction amount, nonitemizers can add a portion of property taxes they paid. The cap is $500 for single filers or $1,000 for filers who are married and file joint returns.
Folks who buy a new vehicle between Feb. 17 and Dec. 31 can add the sales tax paid on the first $49,500 of the auto's cost to their standard deduction.
And filers who live in federal disaster areas can increase their standard deduction by any net casualty losses. In these cases, affected taxpayers also will have to complete Form 4684.
So while claiming the standard deduction will still be the most tax-saving way to go for most folks, Schedule L definitely is going to make the 2009 filing process a little less easy.
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