What is the standard deduction vs. itemized deduction?

 

You can claim the standard deduction or itemize deductions to lower your taxable income. The standard deduction lowers your income by one fixed amount. On the other hand, itemized deductions are made up of a list of eligible expenses. You can claim whichever lowers your tax bill the most.

Read on to understand the difference between the standard deduction and itemized deductions.

Standard deduction

The standard deduction is a fixed dollar amount that reduces the income you’re taxed on. Your standard deduction varies according to your filing status. In 2019, the standard deduction is:standard deduction vs itemized deduction

  • For single or married filing separately — $12,200
  • For married filing jointly or qualifying widow(er) — $24,400
  • For head of household — $18,350

Your standard deduction increases if you’re blind or age 65 or older. In 2019, it increases by $1,650 if you’re single or head of household and by $1,300 if you’re married or a qualifying widow(er).

About nine out of 10 of taxpayers claim the standard deduction. The standard deduction:

  • Allows you a deduction even if you have no expenses that qualify for claiming itemized deductions.
  • Eliminates the need to itemize deductions, like medical expenses and charitable donations.
  • Lets you avoid keeping records and receipts of your expenses in case you’re audited by the IRS.

Itemized deductions

Itemized deductions also reduce your adjusted gross income (AGI). Example: If you’re single and your AGI is $40,000 with itemized deductions of $14,000 your taxable income would be $26,000. If you elected to use the standard deduction you would only reduce AGI by $12,200 making taxable income $27,800.

You might benefit from itemizing your deductions on Form 1040 if you:

  • Have itemized deductions that total more than the standard deduction you would receive (like in the example above)
  • Had large, out-of-pocket medical and dental expenses
  • Paid mortgage interest and real estate taxes on your home
  • Had large, uninsured casualty (fire, flood, wind) or theft losses
  • Made large contributions to qualified charities
  • Had large, unreimbursed miscellaneous expenses

Standard deduction vs. Itemized deductions – state tax considerations

There’s one situation where you may want to itemize deductions even if your total itemized deductions are less than your standard deduction. You might want to do this if you’d pay less tax overall between your federal and state taxes. This can happen if you itemize on your federal and state returns and get a larger tax benefit than you would if you claimed the standard deduction on your federal and state returns. Note that some states do not allow itemized deductions, such as Michigan or Massachusetts.

Itemized deduction limitations

If your AGI from Form 1040, Line 1 was more than certain amounts, some of your itemized deductions were limited. For tax year 2017, the limitations apply if your AGI is more than:

  • $313,800 if married filing jointly or qualifying widow(er)
  • $287,650 for head of household
  • $261,500 for a single taxpayer
  • $156,900 if married filing separately

Note that for tax years 2018 thru 2025 the above limitation was suspended by the Tax Cuts and Jobs Act.

To learn more, see Publication 505: Tax Withholding and Estimated Tax.

Questions about claiming itemized vs. standard deduction

Have additional questions about whether to claim itemized deductions or the standard deduction? Our Tax Pros speak the tricky language of taxes and are committed to helping you better understand your taxes.

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