What is Standard Deduction ?
The portion of your income that is not taxed that can be used to lower your tax liability is referred to as the standard deduction. The standard deduction is a set sum of money that lowers the amount of income that is subject to taxation. The standard deduction reduces a taxpayer’s taxable income. It assures that only households with income above particular limits will owe any income tax.
If you do not use Schedule A of Form 1040 to itemize your deductions when determining your taxable income, the Internal Revenue Service (IRS) permits you to claim the standard deduction. Your filing status, age, and whether you are considered disabled or a dependent on another person's tax return all affect how much of a standard deduction you are eligible for.
The total of the basic standard deduction plus any additional standard deductions for old age or blindness constitutes your standard deduction. Generally speaking, the standard deduction changes depending on your filing status, whether you are 65 or older, blind, and/or whether another taxpayer can claim you as a dependent. It is also adjusted annually for inflation. Certain taxpayers are not eligible for the standard deduction.
On line 12 of your Form 1040 tax return, you can deduct the standard deduction amount from your taxable income. It's a predetermined amount that doesn't take your unique circumstances into account very much. Depending on your filing status and if you're married, there are five standard deductions :
- Single
- Married filing jointly
- Married filing separately
- Qualifying widow(er)
- Head of household (single but with one or more dependents)
NOTE :
Different qualifying criteria, standard deductions, tax rates, and credit and deduction eligibility apply to each of these statuses.
Key Facts of Standard Tax Deduction
- The part of your income that is not taxed that can be deducted from your taxes is known as the standard deduction.
- The amount of income you must pay taxes on is decreased by the standard deduction.
- Every year, the IRS updates the standard deduction to account for inflation.
- Your filing status, age, and other factors will determine how much of a standard deduction you are eligible for.
- The standard deduction and itemized deductions are both options available to taxpayers.
- Because they don't have to keep track of all potential qualifying expenses, most people opt for the standard deduction.
- The IRS gives you the standard deduction without asking any questions, even if you don't have any other allowable deductions or tax credits.
How Does the Standard Deduction Work ?
The amount of money the federal or state government deducts from your taxable income is known as income tax. It's critical to understand that taxable income and annual income are two different things. This is so that the amount of income that is taxed can be reduced by the government allowing a percentage of the total income received to be removed or deductible. Due to deductions, which help you pay less in taxes, your taxable income is typically lower than your overall income.
The simplest strategy to lower your taxable income on your tax return is to use the standard deduction. Instead of keeping track of actual costs, keeping receipts, and completing additional tax forms, you merely claim a flat sum of money set by the IRS. You can deduct a variety of expenses as itemized deductions, such as out-of-pocket medical costs, state and local taxes, house mortgage interest, and charitable contributions.
The standard deduction and a list of itemized deductions are the two types of deductions that the IRS offers to taxpayers. The standard deduction is an amount that can be deducted from your taxable income that has been determined by the government. This amount lowers the amount of income that is subject to tax when you claim it on your annual tax return. The standard deduction represents your tax filing status and is adjusted annually for inflation.
If you are 65 years of age or older at the end of the tax year, you are eligible for an additional standard deduction. If a person is blind as of the last day of the tax year, they are eligible to claim an extra deduction.
- On your tax return, you can only choose to itemize or take the standard deduction. In essence, itemized deductions are costs that the IRS permits and which can lower your taxable income.
- If you choose the standard deduction, you cannot deduct your house mortgage interest or any of the other widely used tax deductions, such as charitable contributions and medical costs.
- Your standard deduction is reduced if someone can include you as a dependent on their tax return.
- If you're over 65 or blind, you can increase your standard deduction.
Note :
You must have a certified letter from an eye doctor declaring that you have 20/200 vision in your best eye that cannot be corrected or that your field of vision is 20 degrees or less in order to be considered blind.
How Much is the Standard Deduction ?
Your eligibility for the standard deduction is determined on your filing status, age, and whether you are blind. The TCJA almost doubles the amounts for each filing status, at least through 2025, when the law could theoretically expire, with annual adjustments made to account for inflation.
If you're uncertain about your filing status, the IRS has an interactive tool to help you determine how much you're entitled to. About 15 minutes are needed to finish it. The standard deduction amounts for tax years 2023 and 2024 are as follows :
Standard Deduction Amounts for 2024 (Returns Due April 2025)
|
Filing
Status |
Standard Deduction 2023 |
Standard Deduction 2024 |
|
Single |
$13,850 |
$14,600 |
|
Married
Filing Separately |
$13,850 |
$14,600 |
|
Heads
of Household |
$20,800 |
$21,900 |
|
Married
Filing Jointly |
$27,700 |
$29,200 |
|
Surviving
Spouses |
$27,700 |
$29,200 |
Additional Standard Deduction for People Over 65
An additional standard deduction, which is added to the ordinary standard deduction for their filing status, can be claimed by taxpayers who are blind or who are 65 years of age or older.
|
Filing Status |
Taxpayer Is: |
Additional Standard Deduction 2023 (Per Person) |
Additional Standard Deduction 2024 (Per Person) |
|
Married Filing Jointly or Married Filing Separately |
Blind |
$1,500 |
$1,550 |
|
Married Filing Jointly or Married Filing Separately |
65 or older |
$1,500 |
$1,550 |
|
Married Filing Jointly or Married Filing Separately |
Blind AND 65 or older |
$3,000 |
$3,100 |
|
Single or Head of Household |
Blind |
$1,850 |
$1,950 |
|
Single or Head of Household |
65 or older |
$1,850 |
$1,950 |
|
Single or Head of Household |
Blind AND 65 or older |
$3,700 |
$3,900 |
It can be challenging to navigate the additional standard deduction amounts. A table that helps you determine the standard deduction you can claim depending on your date of birth (and the date of your spouse's birth, if applicable) and whether you and your spouse are legally blind is usually included in the IRS instructions for Form 1040.
How to Calculate the Standard Deduction ?
You can estimate your standard deduction using the information from this interview. Details you might need :
- Fundamental financial data, such as sums and adjusted gross income.
- Dates of birth for you, your spouse, and your filing status.
The IRS tool is intended for taxpayers who were residents of the United States or U.S. citizens for the whole tax year in question. If married, both partners must have spent the entire tax year as citizens or residents of the United States. Please visit International Taxpayers for details on nonresidents and dual-status aliens.
Increased Standard Deduction
Use Schedule A (Form 1040) to calculate your standard deduction if you suffered a net qualified catastrophe loss and chose to increase your standard deduction by the sum of your net qualified disaster loss. See the Schedule A Instructions and the Form 4684 Instructions for more details.
Who is Eligible for Standard Deduction ?
All tax filers can claim this deduction unless they choose to itemize their deductions. For some taxpayers, these average figures based on filing status can be somewhat adjusted, and there are other criteria that must be met in order to qualify for the standard deduction.
1) The Standard Deduction Based on Age or Blindness :
An additional standard deduction is given to taxpayers who are 65 years of age or older and to those who are legally blind. It is calculated by adding an additional sum to the taxpayer's standard deduction determined by their filing status.
NOTE :
According to IRS regulations, you turn 65 on the day before your 65th birthday.
2) Standard Deduction for Married Couples :
If you are married but file separate returns, you must both take the standard deduction or itemize your deductions. Things is not possible to mix it up and have one spouse itemize while the other takes the standard deduction.
When calculating your taxes, it's always a good idea to use both the standard deduction and the itemized deduction to see which results in the most overall tax savings.
3) Standard Deduction for Dependents :
The standard deduction amounts for taxpayers who can be claimed as dependents on another taxpayer's tax return can vary. Their standard deduction is capped at $1,100 for the 2021 tax year, or $350 more than their earned income. The deduction can never be greater than the standard deduction for their filing status in any situation. Since 2019, this cap amount has been constant.
NOTE :
The dependent deduction is available to everyone who qualifies as someone else's dependent, not simply those whose taxes are claimed.
Not Eligible for the Standard Deduction
The standard deduction is not available to all taxpayers, so these people cannot use this deduction. If you do any of the following:
- If you and your spouse are married and filing separately, and your spouse itemizes.
- Are an alien with dual citizenship or a nonresident for the year.
- You must submit a return covering fewer than 12 months if your annual accounting period has changed.
- Are an estate, a partnership, a common trust fund, or a trust.
You would itemize if the amount of your deductions exceeded the standard deduction. If not, you should decide to use the standard deduction.
NOTE :
Under Article 21 of the income tax treaty between the United States and India, students and business apprentices from that country may be qualified to take the standard deduction.
Special Considerations for Standard Tax Deduction
The following situations allow nonresident aliens or aliens with dual citizenship to claim the standard deduction :
- A nonresident alien who, at the end of the tax year, marries a citizen or resident alien of the United States and makes a joint election with that spouse to be treated as a resident of the United States for the duration of the tax year.
- A nonresident alien at the start of the tax year who becomes a citizen or resident of the United States by the end of the tax year, who marries a citizen or resident of the United States at the end of the tax year, and who jointly elects to be treated as a resident of the United States for the entire tax year.
- Students and business apprentices who reside in India and are qualified for benefits under Section 2 of Article 21 (Payments to Students and Apprentices) of the Income Tax Treaty between the United States and India.
For more information, consult Publication 519, U.S. Tax Guide for Aliens.
How to Claim Standard Deduction ?
Taking the standard deduction is undoubtedly simpler, particularly if you haven't been keeping track of your costs throughout the year. The majority of Americans opt for that, and even if you have no additional eligible expenses to deduct, you can still take the standard deduction.
You can claim a standard deduction while filing your income tax return. When submitting their tax returns, taxpayers have the option to take the standard deduction, which lowers their taxable income and the amount of taxes they must pay. Taxpayers who are 65 years of age or older or who are blind may be able to claim an extra deduction in addition to the ordinary standard deduction.
Taxpayers have the option to itemize their deductions in place of taking the standard deduction. In the past, the standard deduction was selected by around 70% of taxpayers. However, others chose it because it was simpler than figuring out and totaling the costs they could itemize or because they were unaware that itemizing would lower their tax burden. The majority chose it because it was bigger than the itemized deductions they could claim.
If you itemize your deductions, you are not eligible for the standard deduction. Refer to Topic No. 501, Should I Itemize? for more information.
Standard Deduction FAQs
How Much Will Be the Standard Deduction in 2024 ?
The standard deduction is $14,600 whether you file as single or married filing separately for tax year 2024. For heads of household, it is $21,900, and for married couples filing jointly or eligible widow(er) taxpayers, it is $29,200.
If I take the standard deduction, what can I write off ?
For cash contributions of up to $300 that you donated to charities that qualify during the tax year, you are eligible for a "above-the-line" deduction. Other above-the-line deductions include those made to retirement plans, health savings accounts (HSAs), alimony, educational fees, student loan interest, and, if you are self-employed, health insurance premiums for individual health insurance policies.
What is the standard deduction calculation process ?
On line 12 of your 2023-24 Form 1040 tax return, you can deduct the standard deduction amount from your taxable income. It's a predetermined amount that doesn't take your unique circumstances into account very much.
Does the standard deduction apply to everyone ?
The standard deduction is not available to all taxpayers, so these people cannot use this deduction. If you are married and filing separately and your spouse claims itemized deductions, you are not eligible to claim it. are an alien with dual citizenship or a nonresident during the year.
What is the difference between itemized deduction and standard deduction ?
Depending on your filing status, the number of dependents you have, and the year you are filing your taxes, you may be eligible to deduct a certain amount from your taxable income known as the standard deduction. You can write off the cost of a variety of expenses, such as mortgage interest and property taxes, using itemized deductions. It would probably be advisable to itemize your deductions if your total permitted deductions exceed the standard deduction.
Taking the Standard Deduction vs. Itemized Deduction :
It is significantly simpler to claim the standard deduction than the itemized deduction, all you have to do is enter the predetermined deduction amount. As an alternative, you can itemize your deductions and add up all of your eligible annual expenses (such medical costs and charity contributions) before deducting the total from your income.
However, it all relies on your filing status and economic variables. Many taxpayers have discovered that the standard deduction amount delivers a higher deduction than all of their itemized deductions put together. It would probably be a good idea to itemize if you add up all of your allowable deductions and your total exceeds the standard deduction.