43-1041

43-1041. Optional standard deduction

A. A taxpayer may elect to take a standard deduction as follows:

1. In the case of a single person or a married person filing separately, the
standard deduction shall be four thousand fifty dollars, subject to subsection G of this
section.

2. In the case of a married couple filing a joint return or a single person who is
a head of a household, the standard deduction shall be eight thousand one hundred
dollars, subject to subsection G of this section.

B. The standard deduction provided for in subsection A of this section shall be in
lieu of all itemized deductions allowed by section 43-1042 which are to be subtracted
from Arizona adjusted gross income in computing taxable income, but not in lieu of the
personal exemption allowed by section 43-1043.

C. The standard deduction shall be allowed if the taxpayer so elects, and the
department shall by rule prescribe the manner of signifying such election in the return.

D. In the case of a husband and wife, the standard deduction provided for in
subsection A of this section shall not be allowed to either if the taxable income of one
of the spouses is determined without regard to the standard deduction.

E. The standard deduction provided for by subsection A of this section shall not be
allowed in the case of a taxable year of less than twelve months on account of a change
in the accounting period.

F. Under rules adopted by the department, a change of an election to take, or not
to take, the standard deduction 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, for the purposes of subsection D of this section, to the
taxable year of the taxpayer, the change shall not be allowed unless, in accordance with
such rules, both paragraphs 1 and 2 of this subsection apply:

1. The spouse makes a change of election with respect to the standard deduction for
the taxable year covered in such separate return consistent with the change of election
sought by the taxpayer.

2. The taxpayer and spouse consent in writing to the assessment, within such period
as may be agreed upon with the department, 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.

G. For each taxable year beginning on or after January 1, the department shall
adjust the dollar amounts prescribed by subsection A, paragraphs 1 and 2 of this section
according to the average annual change in the metropolitan Phoenix consumer price index
published by the United States bureau of labor statistics. The revised dollar amounts
shall be raised to the nearest whole dollar. The designated dollar amounts shall not be
revised below the amounts allowed by the standard deduction in the prior taxable year.