What Is the Standard Deduction in 2020?

The standard deduction is a dollar amount that the US federal tax code allows taxpayers to subtract from their taxable income. It is designed to simplify the filing of tax returns by reducing the amount of income that must be reported to the government. For the 2020 tax year, the standard deduction was increased to $12,400 for individuals and $24,800 for married couples filing a joint return.

How It Works

The standard deduction lowers the amount of income the taxpayer reports on their tax return, resulting in a lower taxable income. This amount is then used to calculate the taxpayer’s overall tax liability. For example, for a single taxpayer whose taxable income is $50,000, the standard deduction of $12,400 would reduce their taxable income to $37,600. This amount would then be taxed at the applicable tax rate.

What Do I Need to Know About the Standard Deduction?

When filing your federal income tax return, you have the option to choose either the standard deduction or to itemize your deductions. It is important to consider both options and determine which one will result in the least amount of taxes due. In most cases, it is beneficial to claim the standard deduction, as it will result in a lower amount of taxes due. However, if you are able to itemize deductions that exceed the standard deduction amount, then it may be beneficial to itemize your deductions.

It is also important to understand that the standard deduction can be impacted by certain circumstances. For instance, if you are age 65 or over, are blind or have a qualifying disability, then you may be eligible for an increased standard deduction amount.

The standard deduction for the 2020 tax year is $12,400 for individuals and $24,800 for married couples filing a joint return. In most cases, it is beneficial to claim the standard deduction, as this will result in a lower amount of taxes due. However, it is important to understand that the standard deduction can be impacted by certain circumstances. If you are age 65 or over, are blind or have a qualifying disability, then you may be eligible for an increased standard deduction amount.