Just because you're not married or don't have kids doesn't mean you're not eligible for tax deductions. There aren't specific tax deductions for singles, but there are still plenty of deductions you're eligible to take. Some of the more common ones may pop up if you own your own home or business, donate to charity or incur medical expenses. Ultimately, many tax tips for singles aren't too different from those for married people.
You can deduct a variety of business, educational and medical expenses on your tax return regardless of your marital status. Also, if you are actively contributing to a retirement account, this can also be an excellent way to reduce your overall tax bill.
Things to Claim on Taxes
While many people simply take the standard deduction on their taxes, some taxpayers can save more money by itemizing their deductions. For single people, the standard deduction is $6,350 in 2017 and $12,000 in 2018.
Deductions that you can claim if you itemize include donations that you make to charity. If you find yourself donating money or valuable goods to nonprofit organizations over the course of the year, make sure you get receipts and keep records of what you've donated and how much it was worth. At the end of the year, this may bring you a helpful tax break.
Additionally, if you own your own home and have a mortgage, you can likely take a deduction for the interest you've paid on that loan over the course of the tax year. You can also deduct your state and local property tax. Whether you own or rent, you can deduct income and sales tax on your federal return.
You can deduct medical expenses that you've incurred over the course of the year, to the extent that they exceed 7.5 percent of your adjusted gross income. This can include what you actually pay to providers like doctors and dentists as well as any costs incurred in traveling to medical appointments.
Deducting Business Expenses
If you run your own business either part time or full time, you can also deduct business expenses. This can include the cost of materials and supplies, communications expenses like postage or internet costs, the cost of running a home office or separate facility and the cost of business travel. These types of business expenses are filled out on Schedule C of your tax return, and they're separate from itemized deductions.
Contributions to retirement accounts such as IRAs and 401(k)s can also help you save on tax, whether you're single or married.
Through 2017, people who are employees can also deduct unreimbursed expenses that exceed 2 percent of their adjusted gross incomes, though this deduction is no longer available as of 2018. You can only claim these expenses if you itemize your deductions.
If you think something might be tax deductible, log the expense and save any receipts you get throughout the course of the year. Consult a tax preparer or the IRS for help if you're not sure.
The Marriage Penalty or Bonus
In some cases, simply being single can save you money on your taxes, depending on whom you marry. Because tax brackets are different for single people versus married couples filing jointly, different couples can end up paying more or less before and after tying the knot. These differences are usually referred to as the marriage penalty or bonus.
Generally, couples with more disparate incomes benefit more in tax terms from marriage, and those with more similar incomes benefit less or even pay more.
2018 Tax Law Changes
Some deductions are affected by the Tax Cuts and Jobs Act, which changes many tax rules for 2018.
For example, the state and local sales tax deduction is now capped at $10,000, while it was unlimited in the past. Employees can no longer deduct unreimbursed expenses. And the mortgage interest deduction is now limited to interest up to $750,000, rather than $1 million as it was in the past.
The standard deduction is higher in 2018, which means some taxpayers may choose to take that $12,000 deduction rather than itemize on their returns.
One group that will benefit from the new law is small business owners, who will be eligible for a new 20 percent deduction on income from their businesses. The deduction begins to phase out above $157,500 for single taxpayers.
Tax bracket changes also mean many taxpayers will pay less, even if they take the same amount in deductions from 2017 to 2018.
2017 Tax Law
Under 2017 tax law, the state and local tax deduction is unlimited. The mortgage interest deduction is limited to interest up to $1 million on a loan. And the standard deduction for a single taxpayer is $6,350, though taxpayers can also claim a personal exemption of $4,050, which won't be available after 2017. Taxpayers can also save if they incur unreimbursed employee expenses.
- Tax Foundation: Marriage Penalties and Bonuses under the Tax Cuts and Jobs Act
- Kiplinger: Tax Savings for Single People
- IRS: Credits & Deductions for Individuals
- Forbes: IRS Announces 2017 Tax Rates, Standard Deductions, Exemption Amounts And More
- Forbes: New: IRS Announces 2018 Tax Rates, Standard Deductions, Exemption Amounts And More
- MarketWatch: What the New Tax Law Will Do to Your Mortgage Interest Deduction
- CNN: Making Sense of the New Cap on State Tax Deductions
- CNBC: Don't Overlook the Expanded Tax Deduction for Medical Expenses
- IRS: Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship)
- IRS: IRS Issues Proposed Regulations on new 20 Percent Deduction for Passthrough Businesses
- Internal Revenue Service. "About Schedule A (Form 1040), Itemized Deductions." Accessed Dec. 6, 2019.
- Internal Revenue Service. "Instructions for Schedule A (Form 1040)," Pages 1–12. Accessed Dec. 6, 2019.
- Internal Revenue Service. "Schedule A." Accessed Jan. 29, 2020.
- Internal Revenue Service. "Publication 5307: Tax Reform Basics for Individuals and Families," Pages 8–10. Accessed Dec. 6, 2019.
- Internal Revenue Service. "IRS Provides Tax Inflation Adjustments for Tax Year 2019." Accessed Dec. 6, 2019.
- Internal Revenue Service. "Publication 5307: Tax Reform Basics for Individuals and Families," Page 9. Accessed Dec. 6, 2019.
Steven Melendez is an independent journalist with a background in technology and business. He has written for a variety of business publications including Fast Company, the Wall Street Journal, Innovation Leader and Ad Age. He was awarded the Knight Foundation scholarship to Northwestern University's Medill School of Journalism.