Current standard deductions

When it comes to filing taxes, one of the most important decisions you'll make is whether to take the standard deduction or itemize your deductions.

The standard deduction is a fixed dollar amount that reduces your taxable income and is available to most taxpayers who don't have enough deductible expenses to make itemizing worthwhile.

Key insights

• Standard deduction amounts vary depending on filing status.
• If you are claimed as a dependent on someone else's tax return, you cannot claim the standard deduction.
• The Tax Cuts and Jobs Act of 2017 (TCJA) nearly doubled the standard deduction, making it more attractive for many taxpayers.

What is a standard deduction?

The standard tax deduction is a defined amount a taxpayer can subtract from their income before calculating their income tax. Standard deduction amounts change for single persons, married spouses filing separately or jointly, heads of household and qualifying widow(er)s.

Your standard tax deduction increases when you turn 65 or if you are blind. If your spouse is at least 65 and you jointly file taxes, you can receive additional deductions.

Standard deductions can be used instead of itemized deductions. Itemized tax deductions let you list tax-deductible expenses, such as medical expenses or charity donations. Spouses filing separately should keep in mind that their partner’s filing status could affect their deductions.

Standard deductions for 2022

Standard deduction amounts change for single persons, married spouses filing separately or jointly, heads of household and qualifying widow(er)s. According to the IRS, the standard deduction for 2022 ranges from $12,950 to $25,900.

If you are a single filer, the 2022 standard tax deduction for those over 65 or blind increases to $1,750. Married filers who are blind or older than 65 can claim $2,800 collectively.

Standard deductions for 2023

The IRS has provided tax inflation updates for the 2023 tax year (for filing in 2024). The standard deduction for 2023 ranges from $13,850 to $27,700.

How the standard deduction works

Put simply, the higher your deduction is, the lower your taxable income.

When you file your tax return, you can either take the standard deduction or itemize your deductions. Itemizing means adding up all of your deductible expenses, such as mortgage interest, state and local taxes, charitable contributions and medical expenses, then deducting that total from your taxable income. If your itemized deductions are less than the standard deduction, it makes sense to take the standard deduction.

The standard deduction is meant to benefit taxpayers who do not have enough itemized deductions to exceed the standard deduction. The TCJA nearly doubled the standard deduction amounts for all filing statuses. The standard deduction reduces the amount of income that is subject to federal income tax, which lowers your tax liability.

Standard deduction vs. itemized deductions

The standard deduction and itemized deduction are two methods that taxpayers can use to reduce their taxable income, which lowers tax liability.

• Standard deduction: The standard deduction is a fixed dollar amount that taxpayers can claim as a deduction without having to itemize their deductions. This amount changes each year and is based on filing status.
• Itemized deduction: Itemized deductions are specific expenses that taxpayers can deduct from their taxable income, such as medical expenses, mortgage interest, state and local taxes and charitable contributions. Certain itemized deductions have been limited or eliminated under recent tax law changes, so choosing the itemized deductions only makes sense for taxpayers who have a higher total of itemized deductions than the set standard deduction for the year.

Bottom line

The standard tax deduction is a no-questions-asked deduction for those who do not itemize their income tax returns. You should choose the largest deduction available to lower the amount of taxes you owe to the IRS. Most taxpayers benefit from the standard deduction because it is simpler and doesn’t require as many conditions as itemized deductions.