3. The Standard Deduction: When individuals have minimal below-the-line deductions, they are directly granted a standard deduction. The standard deduction under different heads in 2004 was as follows:
i) Single $4,850
ii) Head of household $7,150
iii) Married filing a joint return $9,700
iv) Qualifying widow(er) with dependent child $9,500
v) Married filing a separate return $4,850
4. Miscellaneous Itemized Deductions: These usually include:
i) Interest paid
ii) Taxes paid
iii) Losses incurred
iv) Charitable contributions
v) Medical costs borne
Such miscellaneous deductions are permissible if and only if they surpass 2% of adjusted gross income.
Keywords: Tax Deductions, Tax Savings, Tax Planning