Increased Itemization on Form 1040

Initial data collected by the Internal Revenue Service suggests that more filers of Form 1040 are taking the standard deduction this year than did so in the past.

The most recent information from a study of returns filed through March 3 shows that 41 percent of Form 1040 filers are itemizing deductions, compared to almost 49 percent last year at this point. This data, based on a sample of returns rather than an actual count, suggests that more people may be taking advantage of the higher standard deduction and increased personal exemption amounts this year and ceasing to itemize their deductions.

The standard deduction this year for most people is $3,000 for those claiming the single filing status, $5,000 for married couples filing a joint return, and $4,400 for the head of household filing status. The standard deduction amounts are higher for taxpayers who are 65 or over or are blind.

The tax package contains charts to help determine the standard deduction amount taxpayers should use. The IRS notes that entering the wrong standard deduction amount has been a common error in returns filed this year and urges everyone to read carefully the instructions in the tax package.

The personal exemption for 1988 returns is $1,950, an increase from $1,900 last year.

With 43.3 million individual income tax returns received as of March 10, total receipts of all three types of individual returns are up 2.2 percent overall, although receipts of Form 1040 are down 2.5 percent from this time last year. Over 860,000 returns were filed electronically as of March 9.

As of March 10 the IRS processed a total of over 29 million returns, up 2.2 percent from last year. Last week alone the IRS processed over 7 million returns, up 10 percent.

Refunds certified through March 10 are down about 3 percent, at 18.4 million, but the average refund is higher: $827 compared to $802.

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