The Standard Tax Deduction (Year by Year from 2013 – 2023)

Are you tired of paying more taxes than you have to? Do you wish there was a way to keep more hard-earned money in your pocket?

Well, there is! Introducing the standard deduction. It’s a powerful tool that can help you lower the taxes you owe each year.

For the tax year 2022 (filed in 2023), the standard deduction is $12,950 for single filers, $25,900 for married filing jointly filers, and $19,400 for head of household filer.

For the 2023 tax year (filed in 2024), the standard deduction will be $13,850 (single), $27,700 (married, filing jointly), and $20,800 (head of household).

The standard deduction can benefit you whether you’re a student, a working professional, or a retiree.

In this article, we’ll take a closer look at the standard deduction, how it works, and how you can take advantage of it to save money on your taxes.

So, read on and discover how to put more money back in your pocket starting today.

Okay, that was a bit of a sarcastic intro. But the standard deduction is a cool thing.

I remember back in the day when life wasn’t as complicated as it is now, I used to take the standard tax deduction when filing my taxes every year.

No itemizing is required. No Schedule A required. Just a simple tax return with one number for my “below-the-line” deductions.

Don’t get me wrong, I’m glad to have more deductions on my return these days. I just appreciated the simplicity of the standard deduction.

Now, I get to take the standard deduction every other year because of the doubling of the standard deduction. I’ll explain how I do that below.

Who knows, maybe I’ll get back to taking it every year – maybe when I pay off the house note.

What is the Standard Tax Deduction?

The standard deduction is the IRS’s way of accounting for a baseline of taxpayer expenses. Everyone has a few “standard” living expenses, right?

The government has decided by way of the tax code to not tax income used to cover life’s basics. Thus, the standard deduction.

Here’s the official definition from the IRS:

“The standard deduction is a specific dollar amount that reduces the amount of income on which you’re taxed.”

So there you have it. The standard deduction reduces your adjusted gross income, and in effect, reduces the amount of tax that you are required to pay.

How Much is the Standard Deduction?

How much is this deduction? Well, it changes each year and your filing status will also change it.

For the tax year 2022 (filed in 2023), the standard deduction is $12,950 for single filers, $25,900 for married filing jointly filers, and $19,400 for head of household filer.

For the 2023 tax year (filed in 2024), the standard deduction will be $13,850 (single), $27,700 (married, filing jointly), and $20,800 (head of household).

Let’s view the standard tax deduction amounts for the last several years.

Note that a slightly higher standard deduction can be taken if you or your spouse are blind or over 65. Also, the standard deduction is limited if your income doesn’t reach certain levels.

Finally, note that it cannot be taken if your spouse filed married filing jointly and chose to itemize.

Who Qualifies for the Standard Deduction?

Everyone except these four type of folks qualifies for the standard deduction:

• A married individual filing as married filing separately whose spouse itemizes deductions
• An individual who was a nonresident alien or dual status alien during the year
• An individual who files a return for a period of less than 12 months due to a change in his or her annual accounting period
• An estate or trust, common trust fund, or partnership

An Example of Using the Standard Deduction

So how do you apply this standard deduction? Well, let’s use an example. Let’s say your adjusted gross income (the number at the bottom of page 1 of the Form 1040) is $50,000. You are single. Therefore your standard deduction of $12,950 is subtracted from $50,000.

This means that $37,050 will essentially be your taxable income. That’s the number that is applied against the federal tax rates to determine you actual tax paid.

Standard vs Itemized Deductions

As a taxpayer, you must choose (see picture above) whether to take the standard deduction or itemize your deductions on Schedule A. Whichever deduction is greater should be the one you choose (there’s your basic math lesson for the day).

In general, it works out in your favor to itemize if you have mortgage interest, real estate taxes, charitable contributions, and major out-of-pocket medical expenses. Any basic tax software program will be able to handle this calculation for you.

Of course, the standard deduction doubled when the tax laws changed under the Trump administration. This simplified a lot of tax returns because many more people didn’t qualify anymore to itemize their deductions.

But it also created an every-other-year strategy of taking the standard deduction. Let me explain.

Every Other Year Standard Deduction Strategy

Since the standard deduction has been raised significantly, many people (myself included) have turned to taking the standard deduction every other year. This strategy works best if you already make a lot of charitable donations.

The idea is to bunch as many of your itemized deductions from a two-year stretch and try to squeeze them all into one year. The net effect would be that in some years you would be able to take the larger (itemized) deduction.

Let’s use a quick example to explain how this works.

Joe is a single guy with a mortgage who likes to give a lot to his church in a lump sum at the end of the year. His mortgage interest is about $5,000 and he normally gives about 10% of his $50,000 salary (or $5,000).

As you can see, Joe would end up having about $10,000 in itemized expenses each year. With the current standard deduction above $10,000 at $12,950, Joe would not need to itemize ever. But what if every other year Joe waited until Jan 1 of the next year to give to his church?

This strategy would give Joe $15,000 in itemized deductions every other year and the standard deduction of $12,950 for the other years. That’s over $2,000 in additional deductions (net).

Here’s a breakdown showing how this strategy might play out over four years:

Can you apply this strategy to your advantage? Tax software isn’t going to help you much with this, so consider visiting with a CPA to get something like this going.

More FAQs About the Standard Deduction

The standard deduction amount changes every year. The amount is adjusted for inflation, so it typically increases each year slightly.

Some taxpayers are not eligible to claim the standard deduction. For example, you cannot claim the standard deduction if you are required to file a foreign tax return or a tax return for another country.

Taxpayers can claim either the standard deduction or itemize their deductions. Itemizing deductions allows taxpayers to claim specific deductions for things like mortgage interest, charitable donations, and medical expenses. However, if the total of all itemized deductions is less than the standard deduction, it would make more sense to claim the standard deduction instead.

The standard deduction is different for certain groups of taxpayers. For example, the standard deduction for someone who is blind or over the age of 65 is generally higher than for those who are not.

There’s a difference between the standard deduction for single filers and married filers, married filers get a higher standard deduction as they are filing jointly.

What about you? Do you take the standard deduction?