The standard deduction is a fixed dollar amount the IRS lets you subtract from your income before calculating what you owe in taxes

Instead of listing out every expense you paid during the year, the IRS gives you a choice: take a single, flat deduction called the standard deduction, or add up your individual expenses and claim those instead. Most people take the standard deduction because it is simpler and often larger than what they could claim by itemizing.

The standard deduction amount changes every year and depends on three things: your age, your filing status (single, married filing jointly, head of household, and so on), and whether anyone else can claim you as a dependent. A single person under 65 gets a smaller standard deduction than a married couple filing jointly, and anyone 65 or older gets an extra amount added on.

When you subtract the standard deduction from your total income, what remains is your taxable income — the number the IRS uses to calculate your actual tax bill. A larger standard deduction means a smaller taxable income, which means you pay less in taxes.

Key Takeaways

  • The standard deduction is a fixed amount you subtract from your income; the IRS sets it each year and it varies by age and filing status.
  • Taking the standard deduction is simpler than itemizing expenses, and most taxpayers use it because it results in a lower tax bill.
  • Your standard deduction amount is smaller if someone else claims you as a dependent, and larger if you are 65 or older.
  • The standard deduction reduces your taxable income directly, lowering the amount of tax you owe.

How the standard deduction lowers your tax bill

Imagine you earned $50,000 in a year and the standard deduction for your filing status is $13,850. You subtract that amount from your income: $50,000 minus $13,850 equals $36,150. That $36,150 is your taxable income. The IRS then uses tax tables or rates to calculate how much you owe based on that $36,150, not the original $50,000.

Without the standard deduction, you would owe taxes on the full $50,000. The standard deduction is essentially a cushion — a portion of your income that is not taxed at all. The larger your standard deduction, the more income sits in that tax-free zone.

Standard deduction amounts vary by filing status and age

The IRS publishes new standard deduction amounts each January for the tax year you are filing. The amounts are different for each filing status. For the 2024 tax year, a single filer under 65 receives one amount, a married couple filing jointly receives a higher amount, and a head of household filer receives a different amount. These numbers shift slightly upward each year to account for inflation.

If you are 65 or older, you get an additional amount added to your standard deduction. This extra amount is the same whether you are single or married. A married couple where both spouses are 65 or older each get the extra amount, so their combined standard deduction is higher than a couple where only one spouse has reached 65.

If someone else claims you as a dependent — typically a parent claiming an adult child or a grandparent claiming a grandchild — your standard deduction is capped at a lower amount. The exact cap depends on whether you have earned income from a job or only unearned income like interest or dividends.

Standard deduction versus itemizing deductions

You have a choice each year: take the standard deduction, or itemize your deductions. Itemizing means adding up specific expenses you paid — mortgage interest, property taxes, charitable donations, medical expenses above a certain threshold — and claiming that total instead of the standard deduction.

Most people take the standard deduction because it is faster and because the standard deduction is often larger than the total of their itemized expenses. You would only benefit from itemizing if your may be able to access expenses add up to more than your standard deduction amount. A homeowner with a large mortgage and high property taxes might itemize. A renter with few deductible expenses almost certainly benefits from taking the standard deduction.

You cannot claim both. You pick one or the other on your tax return, and you should pick whichever one is larger.

Who gets a reduced standard deduction

If you are claimed as a dependent on someone else's tax return, your standard deduction is limited. This rule most often affects teenagers and young adults whose parents still claim them. Instead of receiving the full standard deduction for a single filer, a dependent gets a smaller amount.

The reduced amount is calculated as the greater of two numbers: either $1,300 (a floor set by the IRS) or your earned income for the year plus $450. So if you earned $8,000 from a summer job and are claimed as a dependent, your standard deduction would be $8,450, not the full single-filer amount. This rule prevents dependents from using the standard deduction to avoid paying any tax on their earnings.

How to find your standard deduction amount

The IRS publishes standard deduction tables on its website each January. You can also find the amounts in the instructions that come with your tax form. To locate your amount, you need to know your filing status and whether you turned 65 before the end of the tax year. If someone claims you as a dependent, you will need to use the reduced standard deduction formula instead.

Tax software and tax preparers automatically fill in the correct standard deduction based on the information you provide. If you are filing by hand, look up your filing status and age in the IRS table, and write that number on your return.

Standard deduction changes year to year

The standard deduction is not fixed forever. Each year, the IRS adjusts it upward slightly to reflect inflation. This means the amount you could claim in 2024 is higher than it was in 2023, and next year's amount will likely be higher still. The adjustment is usually a few hundred dollars, not a dramatic change.

This annual increase is why it matters to look up the current year's amount rather than using last year's number. Using an outdated standard deduction will result in calculating your taxable income incorrectly.

Frequently Asked Questions

Can I claim both the standard deduction and itemized deductions?

No. You must choose one or the other. You should choose whichever is larger. Most taxpayers benefit from the standard deduction, but homeowners with large mortgages or people with significant charitable donations or medical expenses may benefit more from itemizing.

What happens if I do not claim the standard deduction?

If you do not claim it on your return, you are choosing to itemize instead. You would add up your may be able to access expenses and claim that total. If your expenses are smaller than the standard deduction, you will end up paying more in taxes than you would have by taking the standard deduction.

Does the standard deduction explore to self-employed people?

Yes. Self-employed people take the standard deduction the same way employees do. However, self-employed people also deduct business expenses (like supplies or equipment) before calculating their taxable income, which is separate from the standard deduction.

If I am 65, do I get the extra standard deduction automatically?

No. You must claim it on your return. Tax software and tax preparers will ask your age and add the extra amount automatically, but if you are filing by hand, you need to look up the higher amount for someone 65 or older and use that number instead.

Why does the standard deduction change every year?

The IRS adjusts the standard deduction each year to account for inflation. This keeps the deduction from losing purchasing power over time. The adjustment is usually a few hundred dollars and is announced in January for the upcoming tax year.