
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document affected by Public Law 107-16 Section 301(a),]
[Document affected by Public Law 107-16 Section 301(c)(2)]
[CITE: 26USC63]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
               Subchapter B--Computation of Taxable Income
 
   PART I--DEFINITION OF GROSS INCOME, ADJUSTED GROSS INCOME, TAXABLE 
                              INCOME, ETC.
 
Sec. 63. Taxable income defined


(a) In general

    Except as provided in subsection (b), for purposes of this subtitle, 
the term ``taxable income'' means gross income minus the deductions 
allowed by this chapter (other than the standard deduction).

(b) Individuals who do not itemize their deductions

    In the case of an individual who does not elect to itemize his 
deductions for the taxable year, for purposes of this subtitle, the term 
``taxable income'' means adjusted gross income, minus--
        (1) the standard deduction, and
        (2) the deduction for personal exemptions provided in section 
    151.

(c) Standard deduction

    For purposes of this subtitle--

                           (1) In general

        Except as otherwise provided in this subsection, the term 
    ``standard deduction'' means the sum of--
            (A) the basic standard deduction, and
            (B) the additional standard deduction.

                    (2) Basic standard deduction

        For purposes of paragraph (1), the basic standard deduction is--
            (A) $5,000 in the case of--
                (i) a joint return, or
                (ii) a surviving spouse (as defined in section 2(a)),

            (B) $4,400 in the case of a head of household (as defined in 
        section 2(b)),
            (C) $3,000 in the case of an individual who is not married 
        and who is not a surviving spouse or head of household, or
            (D) $2,500 in the case of a married individual filing a 
        separate return.

        (3) Additional standard deduction for aged and blind

        For purposes of paragraph (1), the additional standard deduction 
    is the sum of each additional amount to which the taxpayer is 
    entitled under subsection (f).

                    (4) Adjustments for inflation

        In the case of any taxable year beginning in a calendar year 
    after 1988, each dollar amount contained in paragraph (2) or (5) or 
    subsection (f) shall be increased by an amount equal to--
            (A) such dollar amount, multiplied by
            (B) the cost-of-living adjustment determined under section 
        1(f)(3) for the calendar year in which the taxable year begins, 
        by substituting for ``calendar year 1992'' in subparagraph (B) 
        thereof--
                (i) ``calendar year 1987'' in the case of the dollar 
            amounts contained in paragraph (2) or (5)(A) or subsection 
            (f), and
                (ii) ``calendar year 1997'' in the case of the dollar 
            amount contained in paragraph (5)(B).

     (5) Limitation on basic standard deduction in the case of 
                             certain dependents

        In the case of an individual with respect to whom a deduction 
    under section 151 is allowable to another taxpayer for a taxable 
    year beginning in the calendar year in which the individual's 
    taxable year begins, the basic standard deduction applicable to such 
    individual for such individual's taxable year shall not exceed the 
    greater of--
            (A) $500, or
            (B) the sum of $250 and such individual's earned income.

      (6) Certain individuals, etc., not eligible for standard 
                                  deduction

        In the case of--
            (A) a married individual filing a separate return where 
        either spouse itemizes deductions,
            (B) a nonresident alien individual,
            (C) an individual making a return under section 443(a)(1) 
        for a period of less than 12 months on account of a change in 
        his annual accounting period, or
            (D) an estate or trust, common trust fund, or partnership,

    the standard deduction shall be zero.

(d) Itemized deductions

    For purposes of this subtitle, the term ``itemized deductions'' 
means the deductions allowable under this chapter other than--
        (1) the deductions allowable in arriving at adjusted gross 
    income, and
        (2) the deduction for personal exemptions provided by section 
    151.

(e) Election to itemize

                           (1) In general

        Unless an individual makes an election under this subsection for 
    the taxable year, no itemized deduction shall be allowed for the 
    taxable year. For purposes of this subtitle, the determination of 
    whether a deduction is allowable under this chapter shall be made 
    without regard to the preceding sentence.

                   (2) Time and manner of election

        Any election under this subsection shall be made on the 
    taxpayer's return, and the Secretary shall prescribe the manner of 
    signifying such election on the return.

                       (3) Change of election

        Under regulations prescribed by the Secretary, a change of 
    election with respect to itemized deductions for any taxable year 
    may be made after the filing of the return for such year. If the 
    spouse of the taxpayer filed a separate return for any taxable year 
    corresponding to the taxable year of the taxpayer, the change shall 
    not be allowed unless, in accordance with such regulations--
            (A) the spouse makes a change of election with respect to 
        itemized deductions, for the taxable year covered in such 
        separate return, consistent with the change of treatment sought 
        by the taxpayer, and
            (B) the taxpayer and his spouse consent in writing to the 
        assessment (within such period as may be agreed on with the 
        Secretary) of any deficiency, to the extent attributable to such 
        change of election, even though at the time of the filing of 
        such consent the assessment of such deficiency would otherwise 
        be prevented by the operation of any law or rule of law.

    This paragraph shall not apply if the tax liability of the 
    taxpayer's spouse for the taxable year corresponding to the taxable 
    year of the taxpayer has been compromised under section 7122.

(f) Aged or blind additional amounts

                 (1) Additional amounts for the aged

        The taxpayer shall be entitled to an additional amount of $600--
            (A) for himself if he has attained age 65 before the close 
        of his taxable year, and
            (B) for the spouse of the taxpayer if the spouse has 
        attained age 65 before the close of the taxable year and an 
        additional exemption is allowable to the taxpayer for such 
        spouse under section 151(b).

                   (2) Additional amount for blind

        The taxpayer shall be entitled to an additional amount of $600--
            (A) for himself if he is blind at the close of the taxable 
        year, and
            (B) for the spouse of the taxpayer if the spouse is blind as 
        of the close of the taxable year and an additional exemption is 
        allowable to the taxpayer for such spouse under section 151(b).

    For purposes of subparagraph (B), if the spouse dies during the 
    taxable year the determination of whether such spouse is blind shall 
    be made as of the time of such death.

         (3) Higher amount for certain unmarried individuals

        In the case of an individual who is not married and is not a 
    surviving spouse, paragraphs (1) and (2) shall be applied by 
    substituting ``$750'' for ``$600''.

                        (4) Blindness defined

        For purposes of this subsection, an individual is blind only if 
    his central visual acuity does not exceed 20/200 in the better eye 
    with correcting lenses, or if his visual acuity is greater than 20/
    200 but is accompanied by a limitation in the fields of vision such 
    that the widest diameter of the visual field subtends an angle no 
    greater than 20 degrees.

(g) Marital status

    For purposes of this section, marital status shall be determined 
under section 7703.

(Aug. 16, 1954, ch. 736, 68A Stat. 18; Pub. L. 95-30, title I, 
Sec. 102(a), May 23, 1977, 91 Stat. 135; Pub. L. 95-600, title I, 
Sec. 101(b), Nov. 6, 1978, 92 Stat. 2769; Pub. L. 97-34, title I, 
Secs. 104(b), 111(b)(4), 121(b), (c)(2), Aug. 13, 1981, 95 Stat. 189, 
194, 196, 197; Pub. L. 99-514, title I, Sec. 102(a), title XII, 
Sec. 1272(d)(6), Oct. 22, 1986, 100 Stat. 2099, 2594; Pub. L. 100-647, 
title I, Sec. 1001(b)(1), Nov. 10, 1988, 102 Stat. 3349; Pub. L. 101-
508, title XI, Secs. 11101(d)(1)(D), 11801(a)(4), Nov. 5, 1990, 104 
Stat. 1388-405, 1388-520; Pub. L. 103-66, title XIII, 
Sec. 13201(b)(3)(D), Aug. 10, 1993, 107 Stat. 459; Pub. L. 105-34, title 
XII, Sec. 1201(a), Aug. 5, 1997, 111 Stat. 993.)

     Standard Deduction Adjustments for Tax Years Beginning in 2001

        For adjustment of standard deduction, limitation on standard 
    deduction, and additional amounts under subsecs. (c)(2), (5) and (f) 
    of this section for tax years beginning in 2001, see section 3.05 of 
    Revenue Procedure 2001-13, set out as a note under section 1 of this 
    title.


                               Amendments

    1997--Subsec. (c)(4). Pub. L. 105-34, Sec. 1201(a)(2), in 
introductory provisions, substituted ``(5)'' for ``(5)(A)'' and, in 
subpar. (B), substituted ``by substituting for `calendar year 1992' in 
subparagraph (B) thereof--'' for ``by substituting `calendar year 1987' 
for `calendar year 1992' in subparagraph (B) thereof'' and added cls. 
(i) and (ii).
    Subsec. (c)(5)(B). Pub. L. 105-34, Sec. 1201(a)(1), substituted 
``the sum of $250 and such individual's earned income'' for ``such 
individual's earned income''.
    1993--Subsec. (c)(4)(B). Pub. L. 103-66 substituted ``1992'' for 
``1989''.
    1990--Subsec. (c)(4)(B). Pub. L. 101-508, Sec. 11101(d)(1)(D), 
inserted before period at end ``, by substituting `calendar year 1987' 
for `calendar year 1989' in subparagraph (B) thereof''.
    Subsec. (h). Pub. L. 101-508, Sec. 11801(a)(4), struck out subsec. 
(h) ``Transitional rule for taxable years beginning in 1987'' which read 
as follows: ``In the case of any taxable year beginning in 1987, 
paragraph (2) of subsection (c) shall be applied--
        ``(1) by substituting `$3,760' for `$5,000',
        ``(2) by substituting `$2,540' for `$4,400',
        ``(3) by substituting `$2,540' for `$3,000', and
        ``(4) by substituting `$1,880' for `$2,500'.
The preceding sentence shall not apply if the taxpayer is entitled to an 
additional amount determined under subsection (f) (relating to 
additional amount for aged and blind) for the taxable year.''
    1988--Subsec. (c)(5). Pub. L. 100-647 substituted ``basic standard 
deduction'' for ``standard deduction'' in heading and text.
    1986--Subsec. (a). Pub. L. 99-514, Sec. 102(a), substituted ``In 
general'' for ``Corporations'' in heading and amended text generally. 
Prior to amendment, text read as follows: ``For purposes of this 
subtitle, in the case of a corporation, the term `taxable income' means 
gross income minus the deductions allowed by this chapter.''
    Subsec. (b). Pub. L. 99-514, Sec. 102(a), substituted ``Individuals 
who do not itemize their deductions'' for ``Individuals'' in heading and 
amended text generally. Prior to amendment, text read as follows: ``For 
purposes of this subtitle, in the case of an individual, the term 
`taxable income' means adjusted gross income--
        ``(1) reduced by the sum of--
            ``(A) the excess itemized deductions,
            ``(B) the deductions for personal exemptions provided by 
        section 151, and
            ``(C) the direct charitable deduction, and
        ``(2) increased (in the case of an individual for whom an unused 
    zero bracket amount computation is provided by subsection (e)) by 
    the unused zero bracket amount (if any).''
    Subsec. (c). Pub. L. 99-514, Sec. 102(a), substituted ``Standard 
deduction'' for ``Excess itemized deductions'' in heading and amended 
text generally. Prior to amendment, text read as follows: ``For purposes 
of this subtitle, the term `excess itemized deductions' means the excess 
(if any) of--
        ``(1) the itemized deductions, over
        ``(2) the zero bracket amount.''
    Subsec. (c)(6)(C) to (E). Pub. L. 99-514, Sec. 1272(d)(6), 
redesignated subpars. (D) and (E) as (C) and (D), respectively, and 
struck out former subpar. (C) which read as follows: ``a citizen of the 
United States entitled to the benefits of section 931 (relating to 
income from sources within possessions of the United States),''.
    Subsec. (d). Pub. L. 99-514, Sec. 102(a), substituted ``Itemized 
deductions'' for ``Zero bracket amount'' in heading and amended text 
generally. Prior to amendment, subsec. (d) read as follows: ``For 
purposes of this subtitle, the term `zero bracket amount' means--
        ``(1) in the case of an individual to whom subsection (a), (b), 
    (c), or (d) of section 1 applies, the maximum amount of taxable 
    income on which no tax is imposed by the applicable subsection of 
    section 1, or
        ``(2) zero in any other case.''
    Subsec. (e). Pub. L. 99-514, Sec. 102(a), substituted ``Election to 
itemize'' for ``Unused zero bracket amount'' in heading.
    Subsec. (e)(1). Pub. L. 99-514, Sec. 102(a), substituted ``In 
general'' for ``Individuals for whom computation must be made'' in 
heading and amended text generally. Prior to amendment, text read as 
follows: ``A computation for the taxable year shall be made under this 
subsection for the following individuals:
        ``(A) a married individual filing a separate return where either 
    spouse itemized deductions,
        ``(B) a nonresident alien individual,
        ``(C) a citizen of the United States entitled to the benefits of 
    section 931 (relating to income from sources within possessions of 
    the United States), and
        ``(D) an individual with respect to whom a deduction under 
    section 151(e) is allowable to another taxpayer for a taxable year 
    beginning in the calendar year in which the individual's taxable 
    year begins.''
    Subsec. (e)(2). Pub. L. 99-514, Sec. 102(a), substituted ``Time and 
manner of election'' for ``Computation'' in heading and amended text 
generally. Prior to amendment, text read as follows: ``For purposes of 
this subtitle, an individual's unused zero bracket amount for the 
taxable year is an amount equal to the excess (if any) of--
        ``(A) the zero bracket amount, over
        ``(B) the itemized deductions.
In the case of an individual referred to in paragraph (1)(D), if such 
individual's earned income (as defined in section 911(d)(2)) exceeds the 
itemized deductions, such earned income shall be substituted for the 
itemized deductions in subparagraph (B).''
    Subsec. (e)(3). Pub. L. 99-514, Sec. 102(a), in amending subsec. (e) 
generally, added par. (3).
    Subsec. (f). Pub. L. 99-514, Sec. 102(a), substituted ``Aged or 
blind additional amounts'' for ``Itemized deductions'' in heading and 
amended text generally. Prior to amendment, text read as follows: ``For 
purposes of this subtitle, the term `itemized deductions' means the 
deductions allowable by this chapter other than--
        ``(1) the deductions allowable in arriving at adjusted gross 
    income,
        ``(2) the deductions for personal exemptions provided by section 
    151, and
        ``(3) the direct charitable deduction.''
    Subsec. (g). Pub. L. 99-514, Sec. 102(a), amended subsec. (g) 
generally, substituting provision that marital status be determined 
under section 7703 for provisions relating to election to itemize. See 
subsec. (e).
    Subsec. (h). Pub. L. 99-514, Sec. 102(a), substituted ``Transitional 
rule for taxable years beginning in 1987'' for ``Marital status'' in 
heading and amended text generally. Prior to amendment, text read as 
follows: ``For purposes of this section, marital status shall be 
determined under section 143.''
    Subsec. (i). Pub. L. 99-514, Sec. 102(a), in amending section 
generally, struck out subsec. (i), ``Direct charitable deduction'', 
which read as follows: ``For purposes of this section, the term `direct 
charitable deduction' means that portion of the amount allowable under 
section 170(a) which is taken as a direct charitable deduction for the 
taxable year under section 170(i).''
    1981--Subsec. (b)(1)(C). Pub. L. 97-34, Sec. 121(b)(1), added 
subpar. (C).
    Subsec. (d). Pub. L. 97-34, Sec. 104(b), substituted a blanket 
reference to individuals to whom subsection (a), (b), (c), or (d) of 
section 1 applies and the maximum amount of taxable income on which no 
tax is imposed by the applicable subsection of section 1 for provisions 
specifically referring to amounts of $3,400 in the case of (A) a joint 
return under section 6013, or (B) a surviving spouse (as defined in 
section 2(a)), $2,300 in the case of an individual who is not married 
and who is not a surviving spouse (as so defined), and $1,700 in the 
case of a married individual filing a separate return.
    Subsec. (e)(2). Pub. L. 97-34, Sec. 111(b)(4), substituted ``section 
911(d)(2)'' for ``section 911(b)'' in provisions following subpar. (B).
    Subsec. (f)(3). Pub. L. 97-34, Sec. 121(c)(2), added par. (3).
    Subsec. (i). Pub. L. 97-34, Sec. 121(b)(2), added subsec. (i).
    1978--Pub. L. 95-600 substituted ``$3,400'' for ``$3,200'' in par. 
(1), ``$2,300'' for ``$2,200'' in par. (2), and ``$1,700'' for 
``$1,600'' in par. (3).
    1977--Pub. L. 95-30 completely revised definition of taxable income 
from one using the concept of a standard deduction and consisting of 
subsecs. (a) and (b) entitled, respectively, ``General rule'' and 
``Individuals electing standard deduction'' to definition using the 
concepts of zero bracket amounts and excess itemized deductions and 
consisting of subsecs. (a) to (h) entitled, respectively, 
``Corporations'', ``Individuals'', ``Excess itemized deductions'', 
``Zero bracket amount'', ``Unused zero bracket amount'', ``Itemized 
deductions'', ``Election to itemize'', and ``Marital status''.


                    Effective Date of 1997 Amendment

    Amendment by Pub. L. 105-34 applicable to taxable years beginning 
after Dec. 31, 1997, see section 1201(c) of Pub. L. 105-34, set out as a 
note under section 59 of this title.


                    Effective Date of 1993 Amendment

    Amendment by Pub. L. 103-66 applicable to taxable years beginning 
after Dec. 31, 1992, see section 13201(c) of Pub. L. 103-66, set out as 
a note under section 1 of this title.


                    Effective Date of 1990 Amendment

    Amendment by section 11101(d)(1)(D) of Pub. L. 101-508 applicable to 
taxable years beginning after Dec. 31, 1990, see section 11101(e) of 
Pub. L. 101-508, set out as a note under section 1 of this title.


                    Effective Date of 1988 Amendment

    Amendment by Pub. L. 100-647 effective, except as otherwise 
provided, as if included in the provision of the Tax Reform Act of 1986, 
Pub. L. 99-514, to which such amendment relates, see section 1019(a) of 
Pub. L. 100-647, set out as a note under section 1 of this title.


                    Effective Date of 1986 Amendment

    Amendment by section 102(a) of Pub. L. 99-514 applicable to taxable 
years beginning after Dec. 31, 1986, see section 151(a) of Pub. L. 99-
514, set out as a note under section 1 of this title.
    Amendment by section 1272(d)(6) of Pub. L. 99-514 applicable to 
taxable years beginning after Dec. 31, 1986, with certain exceptions and 
qualifications, see section 1277 of Pub. L. 99-514, set out as a note 
under section 931 of this title.


                    Effective Date of 1981 Amendment

    Amendment by section 104(b) of Pub. L. 97-34 applicable to taxable 
years beginning after Dec. 31, 1984, see section 104(e) of Pub. L. 97-
34, set out as a note under section 1 of this title.
    Amendment by section 111(b)(4) of Pub. L. 97-34 applicable with 
respect to taxable years beginning after Dec. 31, 1981, see section 115 
of Pub. L. 97-34, set out as a note under section 911 of this title.
    Amendment by section 121(b), (c)(2) of Pub. L. 97-34 applicable to 
contributions made after Dec. 31, 1981, in taxable years beginning after 
such date, see section 121(d) of Pub. L. 97-34, set out as a note under 
section 170 of this title.


                    Effective Date of 1978 Amendment

    Amendment by Pub. L. 95-600 effective with respect to taxable years 
beginning after Dec. 31, 1978, see section 101(f)(1) of Pub. L. 95-600, 
set out as a note under section 1 of this title.


                    Effective Date of 1977 Amendment

    Amendment by Pub. L. 95-30 applicable to taxable years beginning 
after Dec. 31, 1976, see section 106(a) of Pub. L. 95-30, set out as a 
note under section 1 of this title.


                            Savings Provision

    For provisions that nothing in amendment by section 11801 of Pub. L. 
101-508 be construed to affect treatment of certain transactions 
occurring, property acquired, or items of income, loss, deduction, or 
credit taken into account prior to Nov. 5, 1990, for purposes of 
determining liability for tax for periods ending after Nov. 5, 1990, see 
section 11821(b) of Pub. L. 101-508, set out as a note under section 29 
of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 1, 2, 3, 56, 161, 211, 1034, 
1375, 3402, 6012, 6013, 6014, 6212, 6504 of this title.
