Standard Deduction and Tax Computation

Time Requirement: 20 minutes

Purpose

Most taxpayers have a choice of taking the standard deduction or itemizing deductions. Students will learn to determine the type of deduction that results in the lower tax, and how to determine the correct deduction amount and subtract it from the taxpayer's AGI.

Objectives

• Determine the standard deduction amount for most taxpayers
• Determine the standard deduction amount for taxpayers claimed as dependents
• Identify how taxable income and income tax are computed and reported

Teaching the Lesson

Refer to the Lesson Plan for helpful instructor notes, visual aids, TaxSlayer® demos, and Internet links. Prompt students to share what they know about determining which standard deduction taxpayers should use.

Refer students who may want to work independently to Publication 4491, Standard Deduction and Tax Computation.

Key References

This lesson will refer to the following publications and forms:

• Form 13614-C, Page 1, Part I
• Publication 4012, Deductions tab
• Publication 17, Chapter 20, Standard Deduction

All references to materials can be found by clicking Job Aids and Media buttons. There are also links to helpful tools that can be found on the irs.gov public portal. For this lesson, student can link to the following sites for additional help:

• Interactive Tax Assistant: How Much is My Standard Deduction?
• Tax Topics: Standard Deduction

TaxSlayer® Demos and Tutorials

It is recommended to go to the Practice Lab and access the latest TaxSlayer tutorial for this lesson. The TaxSlayer tutorials can be found by going to the Practice Lab and clicking the link for TaxSlayer IRS training.

Publication 4012, Deductions tab, will include examples of how to enter the standard deduction and compute the tax in TaxSlayer.