Tax deductions allow businesses and individuals to reduce their overall tax bills by subtracting certain expenses from their taxable income. The IRS gives individuals a choice of itemizing their deductible expenses or deducting a predetermined amount allowed given their filing status. In the event the former is chosen, the IRS would expect the itemized expenses to be substantiated upon request. This predetermined amount is what we call the “standard deduction.” The Standard deduction allows you a deduction even if you have no expenses that qualify for claiming itemized deductions. It also allows you to avoid keeping records and receipts of your expenses in case you’re audited by the IRS.
2018 Standard Deduction Amounts
Standard deduction amounts are determined based on your filing status. The standard deductions are as follows:
Single $12,000
Married Filing Jointly & Surviving Spouse $24,000
Married Filing Separately $12,000
Head of Household $18,000
If you are age 65 or over, blind or disabled, you can add on $1,300 to your standard deduction ($1,600 for unmarried taxpayers).
About two out of every three returns claim the standard deduction.
