Standard deduction

Standard Deduction

In 2018, it’s $12,000 for single filers and separate married filers, $24,000 for jointly filing married filers and $18,000 for head of household.

Even if you have no other qualifying deductions or tax credits, the lets you take the standard deduction on a no-questions-asked basis. The standard deduction reduces the amount of income on which you must pay taxes. 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. The standard deduction means that you can not deduct interest on home mortgages or take many other popular tax deductions-for example, medical expenses or charitable donations. (But if you itemize, you should hang onto supporting your deductions in case the IRS decides to you.)

The standard deduction is $1,300 higher for those who are over 65 or blind; it’s $1,600 higher if also unmarried and not a surviving spouse. If someone can claim you as a dependent, you get a smaller standard deduction.

The bottom line is this: If your standard deduction is less than your deductions, you should probably itemize and save money. If your standard deduction is more than your deductions, it may be worth taking the standard and saving some time. Try this fast check. Although it is easier to use the standard deduction than to itemize, if you have a mortgage or home equity loan, it is worth seeing whether it would save you money. Use the numbers on Form 1098, the Mortgage Interest Statement . Compare the deduction amount of your mortgage interest to the standard deduction. Property taxes, state income taxes or sales taxes, and charitable donations may also be deductible. Run the numbers in both directions. If you use tax software, it’s probably worth the time to answer any questions you may have about detailed deductions. Why is that? The software can run both ways to see which method will produce a lower tax bill. Even if you end up with the standard deduction, you’ll at least know you’re coming forward.