Not everyone can use the standard deduction because of certain tax activities or filing statuses. Within about five minutes, you’ll know exactly how much you can deduct from your income. There is an IRS tool that you can use to calculate your own standard deduction. 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.
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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. Standard Deductions by Age: 2023 Tax Year
If you’re married and filing jointly or you qualify as a widow(er), it can increase by $1,500. 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.
Individuals who are at least partially blind or at least 65 years old get a larger standard deduction. If you’re the head of your household, it’s $19,400.įor 2023, the federal standard deduction for single filers increased to $13,850, for married filing jointly it raised to $27,700 and for the head of household filers, it increased to $20,800. It’s $25,900 if you’re a surviving spouse or you’re married and you’re filing jointly. For the 2022 tax year, which we file in early 2023, the federal standard deduction for single filers and married folks filing separately was $12,950. The standard deduction is tied to inflation, so the amounts change a bit each year. The size of your standard deduction depends on a few factors: your age, your income and your filing status. 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. 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. Not everyone will itemize deductions, however. 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. Deducting these individual expenses on your tax return is known as itemizing deductions. Many costs and contributions are deductible, including charitable gifts, mortgage interest, student loan interest, some business-related costs and medical expenses.
Once you have a handle on the things that you may be able to claim then you can calculate your potential tax bill. Regardless of where you stand on the financial front, there are a wide range of expenses that you may be able to deduct from your taxes. That’s where tools like deductions come in. Whether you’re a business owner or an employee, you probably want to keep your income tax bill as low as possible.
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