More than 127.5 million taxpayers had claimed the standard deduction on their 2019 federal tax returns as of July 23, 2020, according to IRS statistics. This has been attributed to the Tax Cuts and Jobs Act of 2017 and its substantial increase in standard deduction amounts across the board. Claiming the standard deduction is certainly an easier option than itemizing your deductions, and it results in more tax savings for many taxpayers, particularly while the TCJA is in effect.
What Is a Standard Deduction?
The Internal Revenue Service allows you to deduct a certain amount from your adjusted gross income to help arrive at your total taxable income for the year. This standard deduction, which is available to all taxpayers, automatically lowers the amount of income you'll be taxed on.
The amount you’re able to claim as a standard deduction depends on your filing status, your age, and whether you can be claimed as a dependent on someone else’s tax return. The federal and some state governments have different standard deductions for blind taxpayers and those age 65 and over.
The Standard Deduction in Tax Years 2019, 2020, and 2021
The IRS adjusts the standard deduction for inflation each year, so the figures change periodically. For example, the standard deduction amounts for the various filing statuses as of the 2019 tax year, for tax returns filed in 2020, were as follows:
- Single: $12,200
- Married filing jointly: $24,400
- Married filing separately: $12,200
- Head of household: $18,350
The standard deduction figures increased for the 2020 tax year, the tax return you'll file in 2021:
- Single: $12,400
- Married filing jointly: $24,800
- Married filing separately: $12,400
- Head of household: $18,650
The numbers ramp up again for tax year 2021, the return you'll file in 2022:
- Single: $12,550
- Married filing jointly: $25,100
- Married filing separately $12,550
- Head of household: $18,800
Determining which standard deduction you qualify for is pretty straight-forward, but you can use the IRS Interactive Tax Assistant tool to help you figure the amount you're entitled to if you have any doubts. This IRS interview walks you through the process of determining your standard deduction in about 15 minutes.
Read More: Can Self-Employed People Claim a Standard Deduction?
Additional Standard Deductions
These standard deduction amounts are for taxpayers who are under age of 65 and not blind. The IRS increases standard deductions for taxpayers who are age 65 or older and legally blind.
You could increase your standard deduction by $1,650 if you filed as single or head of household in the 2019 tax year and if you were 65 years or older or blind. Your standard deduction increased by $1,300 if you were married and filing jointly, and if either you or your spouse was 65 years or older or blind. It went up an additional $2,600, or $1,300 for each spouse, if both you and your spouse were age 65 or older, or blind.
These increased deduction amounts are also indexed for inflation, but they don't go up every year. The above figures also apply to the 2020 tax year for the tax return you'll file in 2021, but they increase to $1,350 if you're married and filing jointly, and to $1,700 in tax year 2021 if you file as single or as head of household on the return you'll file in 2022.
Again, the additional standard deductions apply to each spouse, so you'd qualify for the maximum additional standard deduction if you and your spouse are both blind and over the age of 65.
Standard Deductions for Dependents
On the flip side, some taxpayers are limited to a lesser standard deduction. For example, taxpayers who can be claimed as dependents by another taxpayer are limited to a standard deduction of $1,100 for the 2021 tax year, or $350 plus their earned income, whichever is more.
Standard Deduction vs. Itemizing
Deciding whether you should take the standard deduction or itemize your deductions really comes down to which option provides you with the most tax relief and lowers your taxable income the most. The IRS informs taxpayers to select the option that gives them the biggest tax break, so you might want to prepare your tax return both ways to see which is best. You can't take both the standard deduction and itemize. You must choose one or the other.
How To Take the Standard Deduction
Claiming the standard deduction on your 2020 tax return is about as simple as it gets. You're not required to complete and submit any additional tax forms. You can simply enter the appropriate number on line 12 of the 2020 Form 1040.
Read More: What Are Above-the-Line Deductions?
- Investopedia: Standard Deduction
- IRS: How Much Is My Standard Deduction?
- IRS: Topic Number 501 - Should I Itemize?
- IRS: Itemized Deductions, Standard Deduction
- IRS: Filing Season Statistics
- IRS: IRS Provides Tax Inflation Adjustments for Tax Year 2021
- TIAA: 2020 Tax Guide
- IRS: Revenue Procedure 2020-45
- IRS: Form 1040 U.S. Individual Income Tax Return
- IRS: IRS Provides Tax Inflation Adjustments for Tax Year 2020
- eFile: IRS Standard Tax Deductions 2019. 2020
Tara Thomas is a Los Angeles-based writer and avid world traveler. Her articles appear in various online publications, including Sapling, PocketSense, Zacks, Livestrong, Modern Mom and SF Gate. Thomas has a Bachelor of Science in marine biology from California State University, Long Beach and spent 10 years as a mortgage consultant.