Our opinions are our own. Here is a list of our partners and here's how we make money. The standard deduction is a specific dollar amount that reduces your taxable income. Even if you have no other qualifying deductions or tax credits, the IRS lets you take the standard deduction on a no-questions-asked basis. The standard deduction reduces the amount of income you have to pay taxes on. You can either take the standard deduction or itemize on your tax return — you can't do both. Itemized deductions are basically expenses allowed by the IRS that can decrease your taxable income.
Taking the standard deduction means you can't deduct home mortgage interest or take the many other popular tax deductions — medical expenses or charitable donations, for example.
But if you itemize, you should hang onto records supporting your deductions in case the IRS decides to audit you. If someone can claim you as a dependent, you get a smaller standard deduction. If your standard deduction is more than your itemized deductions, it might be worth it to take the standard and save some time.
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. Your standard deduction varies according to your filing status. Secondly, you may want to know what is the standard deduction amounts are.
They are:. File your taxes and get every credit and deduction you deserve. Our tax pros can help you file in person or virtually, or you can file on your own online. Unlike the standard deduction, the dollar amount of itemized deductions differs from taxpayer to taxpayer.
While standard deductions are —as the name implies — a standard or fixed amount, itemized deductions are calculated by adding up all applicable deductions, then subtracting that number from your taxable income. In some situations, it makes sense to itemize vs. Tax Brackets and Tax Rates. The big news is, of course, the tax brackets and tax rates for There are still seven 7 tax rates. Here's how those break out by filing status:. You can compare all of these numbers to the tax tables here.
Standard Deduction Amounts. There will be no personal exemption amount for The personal exemption amount was set to zero 0 under the Tax Cuts and Jobs Act. The alternative minimum tax AMT exemption amounts are adjusted for inflation.
Kiddie Tax. The kiddie tax applies to unearned income for children under the age of 19 and college students under the age of Unearned income is income from sources other than wages and salary, like dividends and interest.
Taxable income attributable to net unearned income will be taxed according to the brackets applicable to trusts and estates see above.
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