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Standard tax amounts are easier for taxpayers

Daylight-savings-time-ends-fall-back

It's that time of year again. Actually, that time was at 2 a.m. today (Sunday, Nov. 3, 2019). That's when most of us said goodbye to Daylight Saving Time and hello to the return of Standard Time. 

As we deal with the timepiece trickery, a lot of us (me!) suffer a sort of jet lag as our body clocks adjust to the new time and impending earlier arrival of sunsets.

But the fall back to Standard Time also is a good reminder that standard is a good thing for millions of taxpayers.

A couple of tax standards, the standard deduction amounts and the standard mileage amounts, take some of the hassle out of filing tax returns.

Standard deduction double-take: Itemized taxes tend to get a lot of attention, at least from tax pros and financial media. The reason is clear. Claiming these expenses on Schedule A is more complicated and takes some planning.

But the truth is that most taxpayers usually claim the standard deduction amount each year instead of itemizing their deductible expenses.

That reason is obvious, too. Taking the standard deduction is easier. You don't have to track expenses, hang onto receipts or meet any income or spending thresholds.

With the enactment of the Tax Cuts and Jobs Act (TCJA) the number of standard deduction filers increased even more. That tax reform law essentially doubled the previous standard deduction amounts, which are based on your filing status.

As with the prior law, the amounts are adjusted annually for inflation.

For 2019 tax returns that are due in 2020, the standard deduction amounts for most taxpayers younger than 65 are:

  • $12,200 for single taxpayers
  • $18,350 for heads of household
  • $24,400 for married filing jointly couples and surviving spouses
  • $12,200 for married filing separately taxpayers

Older or visually disabled filers still get a bump in the standard deduction.

For the 2019 tax year, that's $1,300 for those age 65 or older or who are blind, as defined for tax purposes. In the vision issue, that means seriously limited eyesight as determined by a doctor, not just total blindness.

This added standard deduction amount increases to $1,650 when the taxpayer is also unmarried and not a surviving spouse.

Just check the form: As noted earlier, the ease of the standard deduction is that there are no calculations to make and no record-keeping hassles. All you have to do is look at your tax return.

For 2019, that's the single Form 1040, which now replaces the prior tax law's other versions, Forms 1040A and 1040EZ, and requires as many as six schedules depending on your tax circumstances.

One thing that the TCJA didn't change, though, was that the standard deduction amounts are still listed directly on Form 1040.

Form 1040 draft 2019 tax year version

As you can see on the image above of page 1 of the draft 2019 Form 1040, the standard deduction amounts are listed.

Monitoring business miles: Another thing that can be a hassle at tax time is tracking automotive expenses in connection with tax-related travel.

This is a necessity if you use your vehicle for business. Mileage also can be claimed for medical, charitable and, if you're a relocating member of the military, moving to a new posting.

A quick, and bad news, note here when it comes to some work-related miles. If you're an employee tracking unreimbursed company business miles, you're out of luck. The TCJA eliminated this Schedule A miscellaneous expense.

However, if you're self-employed, either full time or as a side hustle, this transportation write-off remains.

And as the boss behind the wheel, you have two options on how to claim your work-related automotive expenses. You can write off all your actual work-related vehicle expenses or you can claim the standard mileage deduction.

Which is better? As with most things tax, the answer is "it depends." You can find the intricacies of both options and what you should consider before making a business mileage deduction decision in my earlier post on which auto expenses deduction method might cut your business tax bill more.

For the 2019 tax year, the standard mileage rate for business driving is 58 cents per mile.

Other easy mileage claims: Travel done in connection with medical treatments is worth 20 cents per mile.

This amount is claimed as part of your itemized medical expenses and could come in handy in getting you over that deduction's threshold. It's set to go back more than 10 percent of your adjusted gross income unless Congress acts.

That same 20 cents per mile amount is allowed for armed services members' moves.

The IRS usually announces any inflation changes to the business, medical and moving standard mileage rates at the end of November or in early December, so we should be getting 2020's adjustments soon.

But I can tell you right now that the amount for charity-related miles will stay at 14 cents per mile. That paltry deduction limit is set by Congress and not adjusted annually for inflation.

You also might find these items of interest: 

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