Denice R. Preston
What is Standard Deduction?
The standard deduction is the amount of income that is not taxed and can be used as a tax reduction. You can take the standard deduction when you don’t itemize deductions on Schedule A to calculate your taxable income. Your standard deduction depends on your filing status and age. It also depends on whether you’re disabled or claimed on another person’s tax return as a dependent.
Takeaways from the Key Notes
Standard deductions are the amounts of your income that you can use to lower your tax bill.
Each year, the IRS adjusts standard deductions for inflation.
Your filing status, age, and other factors determine your regular deduction amount.
Taxpayers have the option of choosing between itemized and standard deductions.
Understanding Standard Deduction
Income Tax is the money the federal or state governments take from your taxable earnings. The taxable income is not the same as the total earned income for the year. The government allows a certain amount of income to be deducted or subtracted to lower the tax rate. Deductions reduce the tax bill.
The IRS offers taxpayers two types of deductions: itemized and standard deductions. The standard deduction is the amount set by the government to be deducted from your taxable income. The standard deduction is a certain amount the government charges that can be subtracted from your taxable income. This standard deduction is adjusted yearly to reflect inflation and your tax status.
You can claim an additional standard deduction if you’re 65 or older at the end of the year. (You are considered 65 the day before the 65th birthday). Blind people can claim an extra deduction if they are blind at the end of the year. You can declare yourself dependent on someone else in 2022, but your standard deduction is only $1,150, or $400 of your earned income (up to your basic standard deduction).
Below is a list of the standard deductions for the current tax year.
You must present a letter from your eye doctor that certifies that your vision in the best eye is not correctable at 20/200 or that your field of vision is less than 20 degrees.
Special Considerations
Some taxpayers do not qualify for the standard deductibility, so they cannot claim it. You cannot claim the standard deduction if:
You and your spouse are married but filing separately, and both itemize their deductions.
You are a dual-status or non-resident alien during the calendar year.
You must file a tax return under 12 months if you have changed your accounting period.
You should itemize if the value of your itemized deductions exceeds the standard deduction. If you choose the standard deduction, then you will not itemize.
Article 21 of the U.S.A. – India Income Tax Treaty may allow students and business apprentices to claim the standard deductibility. 8
Standard Deduction Amounts
The Tax Cuts and Jobs Act introduced new standard deduction amounts at the end of 2017 that nearly doubled previous quantities. The new average deduction amounts were introduced by the data-component=”link” data-ordinal=”1″ data source=”inlineLink” and data type=”internalLink/a> Tax Cuts and Jobs Act at the end of 2017, nearly doubling previous amounts.
The following are the standard deductions for 2022 and 2023:
Standard Deductions in 2022 and 2023.
Filing Status2022 Standard Deduction2023 Standard Deduction.
Married Filing Separately $12,950 $13,850.
Heads of household $19,400 $20,800.
Married Filing Together $25,900 $27,700.
Surviving spouses $25,900 $27,700.
As mentioned above, some states and the federal income tax system offer higher standard deductions to people over 65 or blind. If you’re 65 years old or older or blind, you may be eligible for an additional $1,400 standard deduction for 2022 or $1,500 in 2023 under federal guidelines. If you’re unmarried and don’t have a spouse, the amounts will increase to $1.750 in 2022 and $1.850 in 2023.
The deduction for the 2023 tax season will increase to $1250, but the $400 total plus the earned earnings remain the same.
The amount of the disaster loss can be added to your standard deduction. However, the disaster must occur in an area declared a disaster by the federal government.
Standard Deduction vs. Itemized Deductions
Taxpayers choose the standard deduction over itemized tax deductions because they do not have to track every qualifying expense during the year. The standard deduction may be higher than what people could get if they added all their tax-deductible expenses together.
The Tax Cuts and Jobs Act also limits the Mortgage Interest Deduction for properties purchased after Dec. 15, 2017, to the first $750,000 in debt (or $375,000. if married filing separately). The previous limit was $1,000,000.
You can choose to itemize or use the standard deduction, but not both. You can list your tax-deductible expenses in the itemized deductions option.
Property Tax.
Medical expenses.
Donations to charities that are eligible.
Gambling losses.
The other costs that affect your tax bill are 17.
What is the standard deduction for 2022
The standard deduction for the tax year 2022 is $12,950, whether you are married, filing separately, or single. Heads of household can claim $19,400, while married filers filing jointly and widows (or other qualified taxpayers) are entitled to $25,900. 11
What is the standard deduction for 2023
The standard deduction for Tax Year 2023 is $13,850 if you are single or married, filing separately. The standard deduction for head of household is $20,800; for married filers filing jointly or widows who qualify, it’s $27,700.
What can I deduct if I take the standard deduction?
If you are self-employed, you can claim above-the-line deductions, including retirement plan contributions and health savings accounts (HSAs), alimony, educator costs, student loan interests, and health insurance premiums.
