Standard Deduction

Before the IRS figures out what you owe, you get to subtract a chunk of income right off the top. That's the standard deduction. For most people it's the bigger deduction compared to itemizing, especially after the 2017 tax overhaul nearly doubled it—which is why roughly 90% of filers take it.

Should you itemize instead? Add up your potential itemized deductions: state and local taxes (capped at $10,000), mortgage interest, charitable contributions, and medical expenses over 7.5% of your income. If that total beats the standard deduction, itemize. Otherwise, take the standard deduction and move on.

The standard deduction essentially makes a slice of your income tax-free. If you're single earning $60,000, the $15,000 standard deduction means you only pay tax on $45,000. Pair that with progressive tax brackets and lower earners end up paying little to no federal income tax.

If you're 65 or older, you get a bonus: an extra $1,950 (single) or $1,550 per spouse (married filing jointly) for 2025. Blind taxpayers get the same bump. These additions offer meaningful relief for retirees on fixed incomes.

One popular planning trick is "bunching" deductions. Instead of donating the same amount every year, you pile two years' worth of charitable giving into one year so your itemized total beats the standard deduction. The next year you take the standard deduction. Over a two-year cycle you come out ahead.