Standard Tax Deduction: Who Qualifies and What You Get
Learn how the standard tax deduction works to lower your taxable income and reduce the amount of federal tax you owe.
The standard tax deduction is a fixed amount that lowers your total taxable income, which can help reduce the amount of federal tax you owe.
Who it's for
This is available to all individuals who file tax returns.
What you get
You receive a set amount that is subtracted from your total income. By lowering your taxable income, you ultimately pay less in taxes.
What it costs you
There is no direct fee to use this deduction. However, to claim it, you must complete and file your annual federal tax returns.
The catch to know
For most people, taking the standard deduction is more beneficial than itemizing. You should only choose to itemize if your specific eligible expenses are higher than the standard deduction amount.
How to apply
- Gather your income records and receipts for the year.
- Determine if your individual expenses exceed the set standard deduction amount.
- Complete your annual federal tax return.
- Select the standard deduction option when filing to reduce your taxable income.