Standard Deduction
Definition
A fixed dollar amount that reduces your taxable income, claimed by most taxpayers instead of itemizing individual deductions. For 2025, it's $15,000 for single filers and $30,000 for married filing jointly.
The standard deduction is the amount you can subtract from your income before calculating taxes owed. Most taxpayers claim the standard deduction because it exceeds the total of their itemizable deductions. After the 2017 Tax Cuts and Jobs Act nearly doubled the standard deduction, approximately 90% of filers now use it.
To determine whether to itemize or take the standard deduction, add up your potential itemized deductions: state and local taxes (capped at $10,000), mortgage interest, charitable contributions, and medical expenses exceeding 7.5% of income. If the total exceeds the standard deduction, itemize. Otherwise, take the standard deduction.
The standard deduction effectively makes a portion of your income tax-free. A single filer earning $60,000 with the $15,000 standard deduction only pays taxes on $45,000. Combined with the progressive tax brackets, this ensures that lower-income earners pay little to no federal income tax.
Taxpayers 65 and older receive an additional standard deduction amount ($1,950 for single filers, $1,550 per spouse for married filing jointly in 2025). Blind taxpayers also receive an additional amount. These additions provide meaningful tax relief for seniors on fixed incomes.
Strategic tax planning around the standard deduction includes "bunching" deductions — concentrating charitable giving and other deductions into alternating years so you exceed the standard deduction in one year and take it in the other, maximizing the total tax benefit over two years.
Where this appears in Clarity
Clarity automatically tracks and calculates these concepts across your connected accounts.
Related Terms
Frequently Asked Questions
Should I take the standard deduction or itemize?
Compare your total itemizable deductions (SALT up to $10,000, mortgage interest, charitable giving, medical expenses over 7.5% of income) to the standard deduction ($15,000 single, $30,000 married for 2025). If itemized total is higher, itemize. If not, take the standard deduction. About 90% of filers benefit from the standard deduction.
What is deduction bunching?
Concentrating deductions into alternating years. Donate two years' worth of charitable contributions in one year (exceeding the standard deduction, allowing you to itemize) and zero in the next year (taking the standard deduction). This maximizes total deduction value over a two-year cycle.