Current Standard Deductions  Your standard deduction is the
amount you deduct from your adjusted gross income (AGI) in order
to calculate your taxable income. The larger your deduction, the
lower your taxable income and the smaller your tax liability
will be. When you file a federal income tax return (usually IRS
Form 1040 or a simplified version of the form), you take either
a standard deduction or you can itemize your deductions. You
take the larger of the two deductions to lower your taxable
income. The IRS increases the standard deduction each year to
adjust for increases in the general rate of inflation. It
calculates the standard deduction by looking at the average
amounts for itemized deductions that taxpayers have claimed in
previous years. However, just because you may elect to itemize
your deductions doesn't always mean you should. The standard
deduction is likely to be close to what your itemized deductions
would be, on average, and is a heck of a lot easier to
calculate. The following table shows