A tax deduction is a type of tax break that reduces the amount of money you owe the government. Tax deductions decrease your tax burden by lowering your taxable income and you can either claim the standard deduction or itemize your deductions when you file. Before the 2018 tax year, the standard deductions were about half as much as they are now. Below, we cover the standard deductions for the tax years 2023 and 2024, which will be filed respectively in early 2024 and early 2025.
Do you have questions about how taxes can affect your long-term retirement and financial plans? Speak with a financial advisor today.
Understanding the Standard Deduction
Whether you’re a business owner or an employee, you probably want to keep your income tax bill as low as possible. That’s where tools like deductions come in. Regardless of where you stand on the financial front, there is a wide range of expenses that you may be able to deduct from your taxes. Once you have a handle on the things that you may be able to claim then you can calculate your potential tax bill.
Many costs and contributions are deductible, including charitable gifts, mortgage interest, student loan interest, some business-related costs and medical expenses. Deducting these individual expenses on your tax return is known as itemizing deductions. In order to claim these deductions, you’ll need to have some kind of evidence indicating that you are eligible to have a portion of your income exempt from taxation.
Not everyone will itemize deductions, however. That’s because there’s also a standard deduction, which is simply a set amount of money that taxpayers can automatically subtract from their adjusted gross income (AGI). Generally, if your standard deduction is greater than the sum of the itemized deductions for which you qualify, then you just take the standard deduction instead. The size of your standard deduction depends on a few factors: your age, your income and your filing status.
How Much Is My Standard Deduction?
The standard deduction is tied to inflation, so the amounts change a bit each year. For the 2023 tax year, which is filed in early 2024, the federal standard deduction for single filers and married folks filing separately was $14,600. It’s $29,200 if you’re a surviving spouse or you’re married and you’re filing jointly. If you’re the head of your household, it’s $21,900.
For 2023, the federal standard deduction for single filers was $13,850, for married filing jointly it was $27,700 and for the head of household filers, it increased to $20,800. Individuals who are at least partially blind or at least 65 years old get a larger standard deduction. If you’re single, you’re married and filing separately or you’re the head of household, your standard deduction amount can increase by $1,850. If you’re married and filing jointly or you qualify as a widow(er), it can increase by $1,500.
Standard Deductions by Age: 2023 Tax Year (filed in 2024)
| If your filing status was… | And at the end of the year you were… | Your standard deduction is… |
| – Single or married filing separately | – Under 65 – 65 or older | – $13,850 – $15,700 |
| – Married filing jointly | – Under 65 (both spouses) – 65 or older (one spouse) – 65 or older (both spouses) | – $27,700 – $29,200 – $30,700 |
| – Head of household | – Under 65 – 65 or older | – $20,800 – $22,650 |
| – Qualifying widow(er) | – Under 65 – 65 or older | – $27,700 – $29,200 |
Standard Deductions by Age: 2024 Tax Year (filed in 2025)
| If your filing status was… | And at the end of the year you were… | Your standard deduction is… |
| – Single or married filing separately | – Under 65 – 65 or older | – $14,600 – $16,450 |
| – Married filing jointly | – Under 65 (both spouses) – 65 or older (one spouse) – 65 or older (both spouses) | – $29,200 – $30,750 – $32,300 |
| – Head of household | – Under 65 – 65 or older | – $21,900 – $23,850 |
| – Qualifying widow(er) | – Under 65 – 65 or older | – $29,200 – $30,750 |
If someone is claiming you as a dependent, your standard deduction amount for 2023 can’t exceed the greater of either a) $1,150 or b) your total earned income plus $400. If you live in a state that requires you to pay income taxes, there may be a state-based standard deduction that you can claim on your state tax return.
There is an IRS tool that you can use to calculate your own standard deduction. Within about five minutes, you’ll know exactly how much you can deduct from your income.
Standard Deduction Restrictions
Not everyone can use the standard deduction because of certain tax activities or filing statuses. It’s important to understand before you file if you fall into these categories so that you don’t make a mistake when filing that triggers an audit. Unfortunately, if you fall into any of the following categories, you’ll likely have no choice but to itemize your deductions:
- Shortened tax return: You file a tax return for a period of fewer than 12 months because you’re changing your yearly accounting period
- Non-residents: You’ve been a non-resident alien at any point during the tax year
- Filing status: You’re married, filing separately and your spouse is itemizing their deductions
- Entity types: Estates, partnerships, common trust funds and trusts also aren’t eligible for the standard deduction.
If you fall into one of these categories then you should consider speaking with a financial advisor who specializes in taxes. They should be able to help you navigate your best tax-related decisions to help you properly prepare and save money when you file.
Standard Deduction vs. Itemized Deduction
The difference between a standard deduction and an itemized deduction is simple. The former is a specific or standard number determined solely by your age and filing status. However, the latter requires you to manually itemize your deductions. That means you would have to sit down, review your financial documents and add everything up.
Ultimately, you’ll have to decide how you want to claim your deductions. That’s because the rule is that you can’t use the standard deduction and also itemize your deductions within the same tax year.
Deciding How to Claim Your Deductions
If you aren’t sure whether to itemize deductions or take the standard deduction, it’s a good idea to run the numbers. Whatever gives you the largest deduction is the one you should probably go for.
Taking the standard deduction is certainly easier, especially if you haven’t been tracking your expenses over the year. Most Americans choose to go that route, and you can claim the standard deduction even if there isn’t a single expense that you’d be able to deduct otherwise. The standard deduction has also become even more attractive since the 2017 Tax Cuts and Jobs Act dramatically increased its size of it while removing or reducing some itemized deductions.
Bottom Line
Deductions reduce the amount of money that you have to pay by the usual April 15 deadline, unless that day falls on a holiday or weekend. The government sets the standard deduction and dictates its amount. All tax filers can claim this deduction unless they choose to itemize their deductions but the right decision for you will depend on a number of factors.
Tips for Tax Planning
- While a tax professional or tax software can help you file your annual taxes, a financial advisor could help you optimize a tax strategy for your entire financial plan. Finding a financial advisor doesnt’ have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- If you just want to estimate how much you’ll pay in taxes, consider checking out our tax calculators to see how federal and state taxes may impact you.
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