Understanding The Standard Tax Deduction

Claim the Standard Deduction on Your 1040 Return to Lower Your Income Tax Liability

Are you going to take the standard tax deduction, or will you claim itemized deductions? To better answer this question, you may need to learn more about the standard deduction and the benefits that it offers. One thing is for sure: you need to take full advantage of as many tax deductions as possible. This is one of the best ways to lower your income tax liability.

What Is the Standard Tax Deduction?

The standard deduction is a set dollar amount based on your filing status, which reduces your taxable income. It is important to note that you cannot take the standard deduction if you are itemizing your deductions. You have to choose one or the other — ideally the one that will do you the most good in terms of tax savings.

As noted above, the standard tax deduction is based on your filing status (including single, married filing separately, married filing jointly, head of household, or qualifying widow/widower).

How Much Is the Standard Deduction Worth?

For tax year 2024, the standard deduction amounts are as follows:

• $14,600 for taxpayers filing as single or married filing separately.
• $21,900 for taxpayers filing as head of household.
• $29,200 for married taxpayers filing jointly (or qualifying surviving spo

The standard deduction amounts tend to change from year to year, as they are adjusted for inflation.

It is important to note that the amount of your standard deduction may be reduced if you are claimed as a dependent on another person’s income tax return.

Standard Deduction vs. Itemized Deductions

So far we’ve explained what the standard deduction is and how it works, but you might have a few questions about how its counterpart—the itemized deduction—works. In a nutshell, while the standard deduction lowers your taxable income by a set number of dollars, the itemized deduction allows you to choose all deductible expenses from a list. The idea is that you get to choose whichever option reduces your tax bill the most.

 

Another question people ask a lot is “is it better to itemize deductions or take the standard deduction?”, but the truth is the answer depends entirely on your financial situation. Some people can reduce their tax bill more if they had many unreimbursed medical expenses throughout the year, while others might not have enough relevant deductions to pick from the list and fare better taking the standard deduction.

 

In the end, you should be familiar enough with your yearly expenses to estimate which option will be more convenient for you come Tax Day. Be warned, however, that taking itemized deductions takes quite a lot of effort and time, and requires you to be able to back up each expense with the proper documentation; otherwise, the IRS might come knocking.

Pros And Cons Of The Standard Deduction

If you need some more help thinking about which type of deduction to take for the 2024 tax year, here are a few advantages that the standard deduction offers over itemization.

Pros Of Standard Deductions

1. Easier and Faster: Perhaps the main benefit of taking the standard deduction is that it makes filing your tax return a lot easier than the alternative. Instead of having to hold on to and organize all sorts of documentation, you need only the most basic of financial records for the standard deduction.
2. Greater Availability: Not only is the standard tax deduction generous by tax standards, it has almost zero restrictions (with only a couple exceptions) on who can claim it. This makes it a very welcome respite for people who have sporadic income or that have steady employment but low income.
3. The Deduction Is Bigger For Certain People: Taxpayers who meet certain criteria (such as being blind or over the age of 65) qualify for a bigger standard deduction, which might exceed even that of the itemized deduction depending on their financial situation.

Cons Of Standard Deductions

1. You Might Save More With Itemized Deductions: A standard deduction is substantial, as we have mentioned, but taxpayers who choose it might be leaving money on the table, so to speak, if they’re able to save more by going with itemized deductions. The allure of a simplified tax filing process might be too much for some, but they’d be letting a good opportunity to save go to waste.
2. It Might Not Be Available To You: The restrictions on the standard deduction are very few, but they do exist. You might not be eligible for the standard deduction if your spouse is filing separately from you and is itemizing on their return. Also, if someone else has claimed you as a dependent on their taxes, that disqualifies you from taking the standard deduction (since you are, technically, a deduction yourself).

The Additional Standard Deduction

Did you know that there is an additional standard tax deduction for people over the age of 65 and/or those who are blind? The deduction for the blind is allowed if you (or your spouse if filing jointly) are medically confirmed to be totally or partially blind as of the last day of the tax year.

The 2021 additional standard deduction for the elderly (age 65 or older) or blind is $1,350. This amount increases to $1,700 if you are using the Single or Head of Household filing status. If you are both elderly and blind, the amount of your additional standard deduction is doubled.

Other additions to the standard deduction may also exist for loss from a Federally-declared disaster area, as well as for state/local real estate taxes.

Who Doesn’t Qualify for the Standard Deduction?

Keep in mind that there are several groups of people who do not qualify to claim the standard deduction. According to the IRS, this includes the following taxpayers:

• A married individual filing as “married filing separately” whose spouse itemizes deductions
• An individual who was a nonresident alien or dual status alien during the year (although there are certain exceptions)
• An individual who files a return for a period of less than 12 months due to a change in his/her annual accounting period
• An estate or trust, common trust fund, or partnership

Understanding the standard tax deduction is very important so you can properly prepare your income tax return. You should do the math to see whether the standard deduction or itemizing deductions does a better job at lowering your tax liability. This will make it easier for you to decide between the standard deduction and itemizing your deductions.

For more information, please see IRS Publication 501 (Exemptions, Standard Deduction, and Filing Information).

Understanding The Standard Deduction: FAQ

 

1. What is the standard tax deduction?

The standard tax deduction is a fixed amount in dollars that is reduced (i.e. deducted) from your taxable income. It’s a practical and time-efficient alternative to the itemized deduction, which can lead to bigger deductions but can be unnecessarily complex. The standard deduction simplifies the tax process and lowers your income tax by a generous amount.

2. How much is the standard time deduction?

The standard tax deduction increases annually to keep up with inflation, and it’s also determined by your filing status plus a couple other factors. For the 2025 tax year, the standard deduction is $15,000 for single filers (and married people filing separately), $22,500 for heads of household, and $30,000 for married couples filing jointly (and qualifying widows).

3. Can everyone take the standard deductions?

Yes and no. Technically, yes, all taxpayers are eligible for the standard tax deduction, but it can be restricted by your filing status or if someone else has claimed you as a dependent on your tax return. Also, some non-resident aliens might not be eligible for the standard deduction even if they are obligated to pay taxes.

4. Can I choose both the standard deduction and also itemize deductions?

No, it must be one or the other. This doesn’t mean you’re bound to a single type of deduction for the rest of your life, but you can only choose one per year on your tax return. That’s why it’s important to know if itemizing deductions will be more beneficial for you than taking the standard one.

5. Is the standard deduction the same for everyone?

No, the standard deduction varies depending on your filing status. Single taxpayers have the lowest standard deduction, married couples filing jointly get a higher one, and heads of household get the highest standard deduction. Also, the deduction is also bigger for taxpayers 65 years or older, and those who are legally blind.

6. Do I have to provide any extra information to the IRS to take the standard deduction?

No, the standard deduction is automatically available to all taxpayers who choose not to itemize their deductions, making it a good option for those who want their tax return to be as straightforward as possible.

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