The standard deduction is a fixed dollar amount that reduces the amount of income on which taxpayers are taxed. The amount of the standard deduction varies depending on a person's filing status and is adjusted for inflation each year.
The 2023 standard deduction is set to increase for all filing status. For single taxpayers and married taxpayers filing separate returns, the standard deduction will increase to $13,850. For married taxpayers filing jointly and surviving spouses, the standard deduction will increase to $27,700. And for heads of household, the standard deduction will increase to $20,800.
This increase in the standard deduction will help to reduce the tax burden for many taxpayers, as they will be able to deduct a larger portion of their income from their taxable income. This will ultimately result in a lower tax bill for many individuals.
Additionally, the 2023 standard deduction also includes an additional standard deduction for those who are blind or over 65 years of age. This additional standard deduction is $1,650 for those who are blind, and $1,300 for those over the age of 65.
It's worth noting that taking the standard deduction is not always the best option for every taxpayer, as itemizing deductions may result in a greater overall tax benefit. Taxpayers should consider their individual circumstances and consult with a tax professional to determine the best course of action.
It's important for taxpayers to stay informed about the changes to the standard deduction and other tax laws to ensure that they are taking full advantage of all available tax benefits.
Have a question? Contact us today to find out whether you should take the standard deduction or itemize your return.