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Financial Planning / Tax Strategies
|Subject: Standard deduction question||Date: 8/14/2010 1:15 PM|
|Author: FAEZ||Number: 110888 of 122524|
My wife and I are retired and we're both over 65.
In figuring out our standard deduction, the 1040 instructions lead me to a worksheet on page 36.
Line 1 is filing status; married filing jointly; I enter $11,400
Line 2: we can't be claimed as dependents on someone else's return so I go to line 3.
Line 3: "Is your earned income more than $650?"
We have no earned income. We have social security, a pension, and interest from investments.
So on line 3, earned income is NOT more than $650 so I enter, as instructed, $950.
Line 4 says, "Enter the smaller of line 1 or line 3. That would be $950.
Line 5; we're both born before January 2, 1945 so we get $2,200 on line 5.
Line 6 adds line 4 and line 5 for a total of $3,150.
Wow! What did I miss? I thought our standard deduction should be $11,400 plus another $2,200 for being old.
Anyone else run into this?
Thanks in advance.
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