Standard deduction for married couples rises in 2007

Published 9:00 pm Saturday, November 18, 2006

WASHINGTON – The new standard deduction for married couples filing a joint income tax return will rise $400 to $10,700 next year following inflation adjustments announced by the Internal Revenue Service Thursday.

The IRS said the deduction for singles and married individuals filing separately will go up $200 to $5,350 and for heads of household up $300 to $7,850.

The changes will affect 2007 returns, filed by most taxpayers in 2008.

Among other inflation adjustments, the value of each personal and dependency exemption, available to most taxpayers, will increase $100 from the 2006 level of $3,300.

Tax bracket thresholds will also shift as a result of inflation. The taxable-income threshold separating the 15-percent bracket from the 25-percent bracket for a married couple filing a joint return will go from $61,300 in 2006 to $63,700.

The income limits applying to the retirement savings contributions credits and contributions to some IRA plans will also rise for the first time in 2007 due to inflation adjustments.