What is Standard Deduction?

The standard deduction is a fixed amount of money that reduces an individual’s taxable income. It is an allowance given by the Internal Revenue Service (IRS) to help taxpayers lower their taxable income. This deduction is available to all taxpayers who do not itemize deductions on their tax returns. The amount of the standard deduction can vary depending on an individual’s filing status and can be adjusted each year by the IRS.

Benefits of the Standard Deduction

The standard deduction is a simplified way for taxpayers to reduce their taxable income. Claiming the standard deduction is simple and requires minimal documentation, making it a popular choice for many taxpayers. It is also beneficial for taxpayers who do not have a lot of itemized deductions to include on their tax return. By taking the standard deduction, they can still reduce their taxable income without having to keep detailed records or make calculations.

How to Claim the Standard Deduction

Claiming the standard deduction is relatively simple. To take the deduction, taxpayers simply need to check the applicable box that corresponds to their filing status. On federal tax forms, this box is generally located on the first page. Taxpayers who are married and filing jointly can choose to claim a higher filing status, which will increase the amount of the standard deduction.

In addition to taking the standard deduction on their federal income tax return, taxpayers can also opt for a state standard deduction. These deductions are usually automatically included on state tax forms, and can provide an additional level of tax savings.

The standard deduction is a great way for taxpayers to reduce their taxable income and save money. By taking advantage of this deduction, taxpayers can lower their taxable income and minimize their tax liability.