When you’re filing your taxes, you have two options for taking deductions: standard or itemized. Standard deductions are easier to take since you simply subtract a set amount from your taxable income. However, some people may benefit more from itemized deductions, which requires you to list (and provide proof of) all eligible expenses during the tax year and subtracting them one by one.
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What is a standard deduction?
A standard deduction is a fixed amount of money that you can subtract from your taxable income. Anyone can take the standard deduction on a no-questions-asked basis. The IRS determines this amount each year by adjusting for inflation, but the amount you can personally deduct from your taxes is based on your filing status (single, married, etc.) and other factors like age or blindness.
For example, let’s say you earned $50,000 this year and your standard deduction is $12,550. You can subtract the $12,550 from your income, leaving you with a taxable income of $37,450. This means you only have to pay taxes on the $37,450 instead of the full $50,000.
The standard deduction is an alternative to itemizing deductions, which entails listing out all of your eligible expenses and subtracting them from your income. If your eligible expenses are less than the standard deduction, it’s usually better to take the standard deduction because it saves you time and effort.
What is an itemized deduction?
An itemized deduction is an expense that you can subtract from your taxable income to lower your tax bill. These expenses must be considered eligible by the government, and you can only claim them if you choose to itemize your deductions instead of taking the standard deduction.
Also read: Common tax deductions & credits for individuals
2022 standard deduction amount
| Filing status | Standard deduction amount for 2022 |
|---|---|
| Single | $12,950 |
| Married, filing separately | $12,950 |
| Married, filing jointly | $25,900 |
| Head of household | $19,400 |
If you’re single or married, but filing separately, you can deduct $12,980 for 2022. If you’re married filing jointly, you can deduct $25,900. If you’re the head of household, you can deduct $19,400.
Blind or over 65 years old: If you’re over the age of 65, or blind, you can add an additional $1,400 to your standard deduction. If you’re also unmarried, you can add $1,750 instead of just $1,400.
2023 standard deduction amount
| Filing status | Standard deduction amount for 2023 |
|---|---|
| Single | $13,850 |
| Married, filing separately | $13,850 |
| Married, filing jointly | $27,700 |
| Head of household | $20,800 |
If you’re single or married, but filing separately, you can deduct $13,850 for 2023. If you’re married filing jointly, you can deduct $27,700. If you’re the head of household, you can deduct $20,800.
Blind or over 65 years old: If you’re over the age of 65, or blind, you can add an additional $1,500 to your standard deduction. If you’re also unmarried, you can add $1,850 instead of just $1,500.
Who is eligible for standard deductions?
Anyone who files a tax return can claim either a standard deduction or an itemized deduction. You can choose which one to use, but you can’t use both.
Here are some of the key factors that determine your eligibility for a standard deduction:
Filing Status: Your filing status (single, married filing jointly, married filing separately, head of household, or qualifying widow(er)) will determine your standard deduction amount.
Age and Vision Impairment: If you are over the age of 65 or blind, you may be eligible for a higher standard deduction amount.
Dependency: If someone can claim you as a dependent on their tax return, your standard deduction may be limited or eliminated.
Income: If your income is above a certain threshold, you may not be eligible for the standard deduction or your deduction amount may be reduced (see tables for 2022 and 2023 below).
Also read: Standard vs Itemized Deductions