Standard Deduction
Quick Definition
A fixed dollar amount that reduces taxable income for taxpayers who do not itemize deductions.
Key Takeaways
- About 90% of taxpayers benefit from taking the standard deduction over itemizing
- The standard deduction is adjusted annually for inflation
- Additional deductions are available for taxpayers aged 65+ or who are blind
- Compare total itemized deductions to the standard deduction to determine which saves more
What Is Standard Deduction?
The standard deduction is a specific dollar amount that the IRS allows taxpayers to subtract from their adjusted gross income (AGI) to reduce taxable income, available to those who choose not to itemize individual deductions. For 2026, the standard deduction is $15,700 for single filers, $31,400 for married filing jointly, and $23,100 for head of household. Additional standard deductions are available for taxpayers who are blind or over age 65. Since the Tax Cuts and Jobs Act of 2017 nearly doubled the standard deduction, approximately 90% of taxpayers now take the standard deduction rather than itemizing. The standard deduction is adjusted annually for inflation and represents one of the simplest ways to reduce federal tax liability.
Standard Deduction Example
- 1A single filer earning $65,000 takes the $15,700 standard deduction, reducing taxable income to $49,300.
- 2A married couple earning $120,000 uses the $31,400 standard deduction, saving $7,536 in federal taxes (at 24% marginal rate).
- 3A taxpayer over 65 gets an additional $1,950 (single) or $1,550 per spouse (married) added to the standard deduction.
Related Terms
Itemized Deduction
Individual tax-deductible expenses that can be listed separately instead of taking the standard deduction.
Tax Bracket
An income range taxed at a specific rate within the progressive federal income tax system.
Marginal Tax Rate
The tax rate applied to the last dollar of income earned, determined by the taxpayer's tax bracket.
W-2 Form
An annual tax document from employers reporting an employee's wages, taxes withheld, and benefits information.
FAFSA (Free Application for Federal Student Aid)
The federal form used to determine eligibility for financial aid including grants, loans, and work-study programs.
401(k)
An employer-sponsored retirement savings plan with tax advantages, often including employer matching contributions.
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