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How the standard deduction works
- Even if you have no other qualifying deductions or tax credits, the IRS gives you the standard deduction on a no-questions-asked basis. The amount reduces your adjusted gross income and lowers the amount of income you have to pay taxes on.
Using the standard deduction is easier, but it’s worth seeing if itemizing would save you more money.
- If you use Form 1040EZ, you have to use the standard deduction; you don’t have the option to itemize.
- If you use the longer Form 1040, you can either take the standard deduction or itemize.
- Using the standard deduction means you can’t deduct home mortgage interest or take many other itemized tax deductions — medical expenses or charitable donations, for example. But if you don’t itemize, you don’t have to hang onto records supporting your deductions in case the IRS decides to audit you.
Here are the standard deduction amounts by filing status:
|Filing status||2018 tax year||2017 tax year|
|Married, filing jointly||$24,000||$12,700|
|Married, filing separately||$12,000||$6,350|
|Head of household||$18,000||$9,350|
- The standard deduction is $1,250 higher for those who are over 65 or blind; it’s $1,550 higher if also unmarried and not a surviving spouse.
- If someone can claim you as a dependent, you get a smaller standard deduction.
When to claim the standard deduction
- Although using the standard deduction is easier than itemizing, if you have a mortgage or home equity loan it’s worth seeing if itemizing would save you money. Use the numbers you find on Form 1098, the Mortgage Interest Statement. Compare your mortgage interest deduction amount to the standard deduction.
- Most tax preparers will calculate your taxes both ways to see which offers a lower tax bill.
- Property taxes, state income taxes or sales taxes, and charitable donations are deductible, too, if you itemize.