What to Know About Standard vs Itemized Deductions

A tax deduction lowers the amount of a taxpayer’s income that is subject to taxes, thereby also lowering the amount that a taxpayer has to pay come tax season. While most taxpayers use the standard deduction, many instead opt for the itemized deduction. Read on to learn more about the differences between these two forms of tax deductions and which is right for you.

What is the Standard Tax Deduction? 

The standard tax deduction is a particular dollar amount that lowers an individual’s taxable income. This amount can then be increased based on:

• A person’s filing status;
• The filer’s age;
• Whether the taxpayer is blind; or
• Whether the taxpayer can be claimed as a dependent.

For instance, the standard deduction for 2023 is $13,850 for single taxpayers and married taxpayers who file separately, $27,700 for taxpayers who file jointly or who are qualified widows or widowers, and $20,800 for those who file as the head of their households. Those who are over the age of 65 years old can claim an additional $1,850, while those who are over the age of 65 years old and blind can claim an additional $3,700. The IRS adjusts the standard deduction amount every year to account for inflation. Taxpayers cannot, however, qualify for the standard deduction if they choose to itemize their deductions.

What are Itemized Deductions? 

Not all taxpayers choose the standard deduction come tax time, but instead opt to itemize their deductions if the allowable total of their itemized deductions is greater than the standard deduction amount. Other taxpayers, on the other hand, are required to itemize their deductions because they don’t qualify for the standard deduction. This includes:

• Taxpayers who are married, but are filing separately and whose spouse itemizes deductions;
• Taxpayers who are nonresident or dual status aliens;
• Taxpayers who file returns for a period of less than a year because of a change in the annual accounting period;
• Estates and trusts; and
• Common trust funds and partnerships.

Taxpayers who choose or who are required to itemize their deductions should use Schedule A when doing so. Generally, the amount of income tax a person owes will be lower if he or she takes the larger of the itemized or standard deductions. Itemized deductions include:

• Certain medical and dental expenses;
• Amounts paid for specific taxes;
• Interest;
• Contributions; and
• Casualty and theft losses.

For help calculating your own itemized deductions, please reach out to our legal team today.

Call Today to Speak with a Dedicated Tax Attorney 

If you are getting ready to file your taxes for this year and have questions about claiming the standard or itemized deduction, don’t hesitate to reach out to experienced CPA, former FBI Special Agent, and dedicated nationwide tax attorney Ronald Cutler, P.A. for help. You can set up a free, one-on-one consultation by calling our office at 386-490-9949 or by reaching out via online message. We are open seven days a week and happy to make weekend appointments to fit your schedule.

Sources: 

irs.gov/newsroom/deductions-for-individuals-what-they-mean-and-the-difference-between-standard-and-itemized-deductions

irs.gov/forms-pubs/about-schedule-a-form-1040