Standard Deduction
A fixed amount of income the IRS lets you subtract before calculating tax, with no receipts required.
The standard deduction reduces taxable income by a fixed dollar amount set annually by the IRS, varying by filing status. Taxpayers can take it or itemize actual deductible expenses instead, whichever produces a lower tax bill — most filers take the standard deduction because it's larger than their itemizable expenses would add up to.
Worked Example
For 2025, a single filer's standard deduction is a fixed dollar amount subtracted from gross income before tax brackets are applied — earn $60,000 and only the amount above that deduction is subject to tax at all.
Advertisement
Ad space