What is the standard deduction for federal income tax

Standard deductions are being increased for the 2023 tax year, the IRS says The IRS is increasing energy-related tax breaks, as well as standard deductions for single and married people and heads of households.

Economy

Updated October 24, 20223:59 PM ET Originally published October 19, 20222:05 AM ET

What is the standard deduction for federal income tax

A sign outside the Internal Revenue Service building in Washington, on May 4, 2021. Patrick Semansky/AP hide caption

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Patrick Semansky/AP

What is the standard deduction for federal income tax

A sign outside the Internal Revenue Service building in Washington, on May 4, 2021.

Patrick Semansky/AP

The Internal Revenue Service is increasing its inflation adjustments for the 2023 tax year after prices for rent, groceries and gas have reached heights not seen in 40 years.

The announcement of adjustments is an annual occurrence, but in a year of high inflation, the move to raise the standard deduction and income thresholds where tax rates take effect may mean savings for people in all income brackets.

For those filing as a single person or filing separately from their spouses, the standard deduction is increasing by $900 to a total of $13,850. The standard deduction for married couples filing jointly is increasing by $1,800 from last year, to $27,700. And for people filing as heads of households, the standard deduction will be $20,800 for the upcoming tax year, up $1,400.

Data released by the Bureau of Labor Statistics last week showed that compared to last year, rent is up 7.2%, electricity prices are up 15.5%, groceries are up 13%, and health insurance is about 30% more expensive.

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Each year when you fill out your federal income tax return, you can either take the standard deduction or itemize deductions. Few people find it worthwhile to itemize anymore, because standard deduction amounts were bulked-up by a major tax overhaul in 2017. Now, the IRS is making standard deductions even bigger, to account for the highest inflation in decades.

How much will the standard deduction be worth on 2022 and 2023 tax returns? That depends on your filing status, age, whether you are blind and whether another taxpayer can claim you as a dependent.

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What Is the Standard Deduction for 2022 and 2023?

The IRS recently released the new tax brackets and standard deduction amounts for the 2023 tax year, meaning the return you’ll file in 2024. Here are the standard deduction amounts for 2022 and 2023 available to most taxpayers.

How Does the Standard Deduction Work?

The standard deduction is the simplest way to reduce your taxable income on your tax return. Rather than tracking actual expenses, saving receipts and filling out additional tax forms, you simply claim a flat dollar amount determined by the IRS.

There’s a wide range of expenses you can claim as itemized deductions, including out-of-pocket medical expenses, state and local taxes, home mortgage interest and charitable contributions.

To itemize write-offs, you must keep receipts or other documentation proving you spent the money.

Itemizing or claiming the standard deduction reduces your taxable income. For example, if you file as a single taxpayer and earn $75,000 in 2022, taking the standard deduction of $12,950 will reduce your taxable income to $62,050.

Generally, the standard deduction is available to anyone who doesn’t itemize, although there are a few exceptions. You cannot claim the standard deduction if:

  • You are married and file separately from a spouse who itemizes deductions
  • You were a nonresident alien or dual-status alien during the tax year
  • You file a return for less than 12 months due to a change in your accounting period
  • You file as an estate or trust, common trust fund, or partnership

Can Itemizing Save You Money?

For some people, itemizing reduces their tax bill more than claiming the standard deduction would. However, an estimated 90% of taxpayers choose to claim the standard deduction.

This wasn’t always the case. Before President Donald Trump signed the 2017 tax law, roughly 30% of taxpayers itemized deductions. But the law temporarily increased the standard deduction—nearly doubling it for all filing statuses. It also eliminated or restricted several itemized deductions, including:

  • Capping the deduction for state and local taxes (SALT) at $10,000
  • Limiting the home mortgage interest deduction to interest paid on up to $750,000 of mortgage debt (up to $375,000 if married filing separately)
  • Eliminating unreimbursed employee expenses

As a result, fewer people benefit from itemizing—a situation that’s likely to remain until those provisions of the 2017 tax overhaul expire on Dec. 31, 2025, or Congress makes changes sooner.

What Is the Additional Standard Deduction?

Taxpayers who are age 65 or older or blind can claim an additional standard deduction, an amount that’s added to the regular standard deduction for their filing status.

Navigating the additional standard deduction amounts can be confusing. IRS preliminary instructions for the 2022 tax year Form 1040 include a table to help you calculate the standard deduction available to you based on when you (and your spouse, if applicable) were born and whether you and your spouse are considered legally blind.

Let’s run through a couple of examples of how the additional standard deduction can work.

Example 1: Jim and Susan are a married couple who file a joint return. They are both over age 65. Susan is blind; Jim is not.

For 2022, they’ll get the regular standard deduction of $25,900 for a married couple filing jointly. They also both get an additional standard deduction amount of $1,400 per person for being over 65. They get one more $1,400 standard deduction because Susan is blind. As a result, their 2022 standard deduction is $30,100: $25,900 + $1,400 + $1,400 + $1,400.

On their 2023 return, assuming there are no changes to their marital or vision status, Jim and Susan’s standard deduction would be $32,200. That’s the 2023 regular standard deduction of $27,700 for married taxpayers filing joint returns, plus three additional standard deductions at $1,500 apiece.

Example 2: Ellen is single, over the age of 65, and not blind. For 2022, she’ll get the regular standard deduction of $12,950, plus one additional standard deduction of $1,750 for being a single filer over age 65. Her total standard deduction amount will be $14,700.

For 2023, assuming no changes, Ellen’s standard deduction would be $15,700: the usual 2023 standard deduction of $13,850 available to single filers, plus one additional standard deduction of $1,850 for those over 65.

IRS Definition of Blindness

To claim an additional standard deduction for blindness, you (or your spouse, if applicable) must be either totally blind by the end of the tax year or get a statement certified by our ophthalmologist or optometrist stating that either:

  • You can’t see better than 20/200 in your better eye with glasses or contact lenses
  • Your field of vision is 20 degrees or less

Standard Deduction for Dependents

If another taxpayer can claim you as a dependent, your standard deduction is limited. For 2022, the standard deduction for dependents is limited to the greater of $1,150 or your earned income plus $400—but the total can’t be more than the normal standard deduction available for your filing status.

For 2023, the limit will be $1,250 or your earned income plus $400, whichever is greater. But again, the amount can never be greater than the usual standard deduction available for your filing status.

For example, say Sarah is a college student who is a dependent of her parents and earns $15,000 from a part-time job in 2022. When she files her 2022 tax return, Sarah’s standard deduction will be the greater of:

  • $1,150
  • $15,400 (her $15,000 of earned income plus $400)

The obvious greater amount there is $15,400. However, since her standard deduction can’t be larger than the normal standard deductible available for her filing status—in this case, single—her standard deduction for 2022 would be $12,950.

Now, let’s say in 2023, Sarah works less, so her earned income will be only $10,000. Her standard deduction would be the greater of:

  • $1,250
  • $10,400 (her $10,000 of earned income plus $400)

Sarah’s standard deduction for 2022 would be $10,400 since it’s less than the normal standard deduction available for her filing status ($13,850 in 2023).

Claiming the standard deduction is usually the easier way to do your taxes, but if you have a lot of itemized deductions, add them up and compare them to the standard deduction for your filing status. Most of the best tax filing software will help you do this. If you have enough deductions, itemizing might be the more beneficial route during the upcoming tax season.

Compare the best tax software of 2022

What is a normal standard deduction?

All tax filers can claim this deduction unless they choose to itemize their deductions. For the 2022 tax year, the standard deduction is $12,950 for single filers, $25,900 for joint filers and $19,400 for heads of household. The deduction amount also increases slightly each year to keep up with inflation.

Can everyone claim a standard deduction?

Not all taxpayers qualify for the standard deduction, which means these individuals can't claim this deduction. 1 You can't claim it if you: Are married and filing separately and your spouse itemizes their deductions. Are a nonresident or dual-status alien during the year.

Do you subtract the standard deduction from taxable income?

You subtract your standard deduction directly from your adjusted gross income. If you do not wish to use the standard deduction, you can claim itemized deductions. Doing so takes additional time, but that extra effort can result in big tax savings, especially if you have big deductions like mortgage interest.

How do I avoid the standard deduction?

You should itemize deductions if your allowable itemized deductions are greater than your standard deduction or if you must itemize deductions because you can't use the standard deduction. You may be able to reduce your tax by itemizing deductions on Schedule A (Form 1040), Itemized Deductions.