Basics

• Standard deduction amounts change each year because the amounts are tied to inflation. Applying the standard deduction in tax return preparation simplifies the process and reduces time, but it should only be used when itemized tax deductions do not offer a greater reduction to your tax obligation.
  
  

Itemized Deductions Overview

• To consider whether to apply the standard deduction, you must be aware of itemized deduction opportunities. Common personal itemized deduction categories include medical and dental expenses, state and local income taxes or sales tax, real estate and personal property taxes, home mortgage and investment interest, home mortgage points, charitable contributions, casualty and theft losses, job expenses and miscellaneous deductions, according to the 1040 website. Some deductions have limits.
  
  

Qualifications

• A few specific instances exist in which you "must" itemize deductions, according to the 1040 site. You might not qualify to use the standard deduction if you are married and filing separately and your spouse itemizes, you are an individual classified as a nonresident alien or dual-status alien during the tax year or you have an unusual "accounting cycle" that adjusts to a period of less than 12 months. Aside from these few instances, you can generally elect either standard or itemized deductions.
  
  

Standard Deduction Add-Ons

• In its overview of the standard deduction process, 1040 points out that you can sometimes add deductions on top of application of the standard deduction. This requires use of the IRS Schedule L. Detailed rules apply, but you can generally claim additional deductions for state and local real estate taxes, net losses for federally declared disasters (Form 4684) and sales or excise taxes on some car purchases after February 16, 2009. Additional add-on deductions apply to people over 65, according to Turbo Tax.
  
  

Standard Deduction Amounts

• To determine if use of the standard deduction is more beneficial that itemizing deductions, online tax preparation software provider Turbo Tax advises that tax preparers complete Schedule A and compare the deductions it offers to standard deduction amounts, which in 2010 are $5,700 for single taxpayers, $11,400 for married people filing jointly and $8,400 for heads of households. High mortgage interest payments and property taxes are often a major consideration when deciding whether standard or itemized deductions are better, according to Turbo Tax.