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Standard Deduction Increased

The standard deduction for people who do not itemize their deductions on Schedule A (Form 1040) is, in most cases, higher for 2009 than it was for 2008. In addition to the annual increase due to inflation adjustments and the increase allowed for the deduction for certain real estate taxes and a net disaster loss, your 2009 standard deduction is increased by any state or local sales tax imposed on the purchase of a qualified motor vehicle after February 16, 2009, and before January 1, 2010.  To figure your 2009 standard deduction, see your tax return instructions booklet. However, you must use Schedule L (Form 1040A or 1040) to figure your standard deduction if:

  • You paid state or local real estate taxes in 2009.
  • You have a net disaster loss on Form 4684, line 18, or
  • You paid state or local sales or excise taxes (or certain other taxes or fees in a state without a sales tax) on the purchase of any new motor vehicle(s) after February 16, 2009, and before January 1, 2010.
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