What is the Standard Deduction?

The standard deduction is the amount of income you get to deduct from your total taxable income. Because the standard deduction lowers your taxable income, it means you pay less income tax.

In 2019, the standard deduction for someone filing as single is $12,200. For a Head of Household, the standard deduction is $18,350. And for married couples, the standard deduction is $24,400.

For example, let’s say you are single, and in 2019 your total taxable, earned income was $48,000. That is the amount your employer will report to the IRS.

When you file your taxes, you report the same amount, but then you get to deduct $12,200 from the $48,000. Now the amount you pay taxes on is $35,800. You would go to the IRS tax table for the year 2019 (this table is currently still a draft on the IRS website) and it will tell you that in 2019, the total tax due on $35,800 (your new taxable income amount) is $4,129.00. If you didn’t have the standard deduction, the total tax due on $48,000 would have been $6,424.

Because of the standard deduction, your tax liability decreased by $2,295. That’s money that you don’t have to pay to the IRS!

Recommended Articles

Should I itemize my deductions or take the standard deduction?

The goal of deductions is to lower the amount of taxable income the IRS will use when calculating the amount of tax you owe. The decision of whether to itemize your deductions or take the standard deduction comes down to one question. Which deduction is bigger and will lower your tax burden more? Currently, the… Read more

Free Tax Preparation is Still Available

You may have been planning to get assistance with your free tax preparation at a Volunteer Income Tax Assistance (VITA) location near you. Unfortunately, to protect the public and volunteers from COVID-19, many VITAs have had to close their in-person tax preparation sites. We know that a tax refund can be a big deal, especially now. We… Read more

Do I need to file a tax return if my only income is Social Security?

Submitted by anonymous. That’s a great question, as many Americans’ only source of income is Social Security. Social Security income is taxed for federal and state income tax purposes. If your earned income exceeds IRS 2019 filing guidelines, you are required to file a tax return with the IRS and in most states. Do I… Read more