§68. Deductions from gross income; optional standard deduction

A. Allowance. In computing net income of an individual, there shall be allowed as a deduction from gross income, at the election of the individual, a standard deduction equal to 10% of the adjusted gross income, as defined herein, or $1,000.00, whichever is the lesser, except that in the case of a separate return by a married individual, the standard deduction shall not exceed $500.00.

B. In lieu of certain deductions. The standard deduction shall be in lieu of all deductions except those which under Subsection C of this section are to be subtracted from gross income in computing adjusted gross income, and federal income taxes paid or accrued.

C. Adjusted gross income defined. As used in this Section, the term "adjusted gross income", when applied to income of an individual, means gross income minus the following deductions:

(1) the deductions allowed by this Chapter which are attributable to a trade or business carried on by the taxpayer, if such trade or business does not consist of the performance of services by the taxpayer as an employee;

(2) the deductions allowed by R.S. 47:62 which consist of expenses paid or incurred by the taxpayer, in connection with the performance by him of services as an employee, under a reimbursement or other expense allowance arrangement with his employer;

(3) the deductions allowed by R.S. 47:62 which consist of expenses of travel, meals, and lodging while away from home, paid or incurred by the taxpayer in connection with the performance by him of services as an employee;

(4) the deductions allowed by R.S. 47:62 which consist of expenses of transportation paid or incurred by the taxpayer in connection with the performance by him of services as an employee;

(5) the deductions allowed by R.S. 47:62 which are attributable to a trade or business carried on by the taxpayer, if such trade or business consists of the performance of services by the taxpayer as an employee and if such trade or business is to solicit, away from the employer's place of business, business for the employer;

(6) the deductions allowed in this Sub-part which consist of losses incurred in any transaction entered into for profit, though not connected with the trade or business;

(7) the deductions other than those provided in Sub-sections C(1), C(6), C(8), and C(9) of this Section, allowed in this Sub-part which are attributable to property held for the production of rents and royalties;

(8) the deductions, other than those provided in Sub-section C(1) of this Section for depreciation and depletion, allowed in this Sub-part to a life tenant of property or to an income beneficiary of property held in trust; and

(9) the deductions, other than those provided in Sub-section C(1) of this Section, allowed in this Sub-part as losses from the sale or exchange of property.

D. Election of standard deduction.

(1) Method and effect of election. The standard deduction shall be allowed if the taxpayer so elects in his return, and the collector shall by regulations prescribe the manner of signifying such election in the return. If the taxpayer on making his return fails to signify his election to take the standard deduction, such failure shall be considered his election not to take the standard deduction.

(2) Change of election. Under regulations prescribed by the collector, a change of an election for any taxable year to take, or not to take, the standard deduction, may be made after the filing of the return for such year. If the spouse of the taxpayer has filed a separate return for any taxable year corresponding, for purposes of R.S. 47:101-B, 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 the standard deduction for the taxable year covered in such separate return, consistent with the change of election 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 collector, 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 regulation.

E. Individuals not eligible for standard deduction.

(1) Husband and wife. The standard deduction shall not be allowed to a husband or wife if the tax of the other spouse is determined on the basis of the taxable income computed without regard to the standard deduction. For purposes of this Part, the determination of whether an individual is married shall be made as of the close of his taxable year, except in cases in which a taxpayer's spouse dies during the taxpayer's taxable year such determination shall be made as of the time of such death; an individual legally separated from his spouse under a decree of divorce or of separate maintenance shall not be considered as married.

(2) Certain other taxpayers ineligible. The standard deduction shall not be allowed in computing the taxable income of:

(a) an individual making a return for a period of less than 12 months on account of a change in his annual accounting period; or

(b) an estate or trust, common trust fund, or partnership.

Amended by Acts 1950, No. 445, §1, Acts 1958, No. 242, §4; Acts 1970, No. 258, §2; Acts 1973, Ex.Sess., No. 8, §1.