What Is the 2023-2024 Standard Deduction?

Tax season always brings the same looming question:

Should you itemize or just go with the standard deduction?

Each year, the IRS gives you two major ways to lower your taxable income—itemized vs. standard deduction—and while most taxpayers choose the standard deduction for its simplicity, is it really the right choice for you?

Thanks to a 2017 tax overhaul and rising inflation, the standard deduction has bulked up over the years, making it the go-to option for many.

For the 2023-2024 tax year, the standard deduction continues to climb, offering $14,600 for single filers, $29,200 for joint filers, and $21,900 for heads of household.

Whether you’re unsure about itemizing or simply want to make sure you’re maximizing your savings, doola is here to simplify taxes, bookkeeping, and everything in between—so you can stress less and save more this tax season.

Quick reminder before we begin:

2023-24 tax season was in April; if you filed an extension, file your return by October 15, 2024.

What Is Standard Tax Deduction?

The standard deduction is a fixed dollar amount the IRS lets you subtract from your adjusted gross income to lower your taxable income.

It is the easiest way to trim your tax bill without needing to itemize, and it gets adjusted each year to keep up with inflation.

• For 2023, the standard deduction is $13,850 for individuals, $27,700 for joint filers, and $20,800 for heads of household.

• In 2024, those amounts rise to $14,600, $29,200, and $21,900, respectively.

Certain taxpayers—like those who are blind or 65 and older—get a higher deduction, while dependents might receive a lower one.

Example:

a. Single taxpayer

Say you’re a single taxpayer earning $70,000 a year.

By claiming the 2023 standard deduction of $16,000 for single filers, you can shave that amount off your taxable income.

So, instead of being taxed on the full $70k, you’re only responsible for paying federal income tax on $54,000.

That $16,000 deduction? It’s all yours, completely untouched by taxes!

b. Married taxpayers

Take the example of a married couple filing jointly in 2023 with an adjusted gross income of $130,000.

With a standard deduction of $29,000, their taxable income gets trimmed down to $101,000 ($130,000 – $29,000).

That’s a sizable tax break that keeps more money in their pocket!

Fun Fact:

The standard deduction was introduced back in 1944 to simplify the already complicated tax process!

And now let’s understand how the standard deduction works.

How Standard Deduction Works

The standard deduction is like the IRS’s “easy button” for tax time—no receipts, no paperwork, just a simple, no-hassle amount you can subtract from your Adjusted Gross Income (AGI).

Instead of dealing with the headache of itemizing every little expense (e.g., long lists of mortgage interest and medical bills), you can opt for this one-size-fits-all deduction.

It’s based on your filing status, your age, and whether you’re claimed as a dependent.

And thanks to inflation, the IRS bumps up the deduction amounts every year to help keep your wallet a little fuller.

If you’re 65 or older—or have visual impairment—you get an extra bump with an additional deduction. But if you’re a dependent, your standard deduction shrinks a bit.

In 2023, for example, dependents were capped at $1,250 or their earned income plus $400 (whichever was higher).

In 2024, these limits went up a bit, to $1,300 or earned income plus $450.

Most people stick with the standard deduction because it’s simple and hassle-free. But, if you’ve got a mountain of deductible expenses, itemizing might be a better option.

Just make sure to keep those receipts in a safe spot!

Why Does Standard Deduction Change?

The standard deduction changes each year to account for inflation. As the cost of living rises, the deduction amount increases to keep up.

This adjustment helps ensure that taxpayers aren’t unfairly burdened by rising prices, allowing them to keep more of their money.

For the 2023-2024 tax year, the IRS has adjusted the standard deduction upward once again.

But how much more will you be able to deduct?

Let the doola experts weigh in!

Our team of tax experts help you navigate these yearly shifts with ease, making sure you maximize every cent of savings.

Speak to a doola expert today.

Let’s now cover standard deduction amounts for the most current tax years.

Standard Deduction for 2023

The standard deduction for the 2023 tax year is one of the easiest ways to lower your taxable income—and with inflation running high, the IRS gave it a nice bump.

For single filers or those married filing separately, the deduction was $13,850.

If you’re married and filing jointly, you got a standard deduction of $27,700.

For heads of household (those supporting dependents and paying at least half of household expenses), the deduction came in at $20,800.

These numbers apply to tax returns that were due by April 15, 2024.

However, if you filed for an extension, you have until October 15, 2024 to get your paperwork in.

Standard Deduction for 2024

Let’s break it down for you.

Your standard deduction amount mainly depends on your tax filing status.

If you’re the head of a household—single, paying for at least half of the household’s costs, and have dependents—you’ll get a bigger deduction than single people or even married ones filing separately.

Here’s the 2024 standard deduction breakdown:

• $14,600 for single filers

• $14,600 for married people filing separately

• $21,900 for heads of households

• $29,200 for married couples filing jointly

• $29,200 for qualifying widows/widowers

If you’re 65 or over—or have some serious visual impairment—you get an extra tax break. For singles and heads of households, that means an extra $1,950 per instance of age or blindness.

If you’re both blind and over 65? The deduction amount doubles to $3,900.

For married couples, it’s an additional $1,550 per instance. So, if both you and your spouse are 65+ and visually impaired, your standard deduction jumps from $29,200 to $35,400.

Tax situations like these can be tricky to navigate, but that’s where doola’s bookkeeping services help—ensuring you get every deduction you deserve, minus the hassle.

Who Benefits Most from the Standard Deduction?

Not sure if you should take the standard deduction or go the itemized route?

Here’s a quick rundown of who might benefit most from taking the standard deduction:

1. Simplifiers:

If you don’t have a ton of deductible expenses (think mortgage interest, medical bills, charitable donations), then taking the standard deduction is often easier and more beneficial.

Why go through the hassle of itemizing when you can take the quick route?

2. Small business owners with clean books:

If you’re a small business owner, keeping your books neat and tidy can make tax time a lot smoother.

doola’s bookkeeping services ensure that you can track all your income and expenses accurately, so you can quickly determine whether the standard deduction is your best option.

3. Those without major changes in income:

If your financial situation hasn’t drastically changed over the past year, the standard deduction might save you more money with less effort.

Who Doesn’t Qualify for Claims?

Most individual taxpayers can enjoy the privileges of the standard deduction, but there are a few who can’t join the party.

If you find yourself in one of these scenarios, you’ll have to sit this one out:

• If you’re married and filing separately and your other half itemizes deductions

• Non-resident or dual-status aliens during the year

• Filing for less than 12 months while changing annual accounting period

• Filing as a trust, common trust fund, partnership, or estate

So if you belong to one of these categories, it’s time to explore other tax strategies.

And that’s what the doola tax experts are here for!

Our team of Certified Public Accountants (CPAs) help you navigate your unique situation and find the best way to maximize your deductions.

Book a CPA consultation today.

How to Claim Standard Deduction?

Claiming the standard deduction is a simple step-by-step process:

Step 1: Form 1040

When you sit down to fill out your federal income tax Form 1040, you’ll find the option to take the standard deduction right on Line 8.

Step 2: Only for Itemizing

If you prefer to itemize your deductions instead, you’ll need to use Schedule A to summarize your medical expenses, state and local taxes, mortgage interest, charitable contributions, and other allowable deductions.

The grand total from Line 17 of Schedule A will flow into Line 12a of your 1040.

If your itemized deductions fall short of the standard deduction but you still want to itemize, there’s a handy box to check on Line 18 of Schedule A.

Step 3: Subtract Standard Deduction

Now you need to subtract the standard deduction from your total income on your Form 1040, and voila! You’ve claimed your tax savings.

And if you want to make this process smoother, doola’s bookkeeping services help you stay organized throughout the year and ensure you’re maximizing your deductions.

Key Considerations for Deductions

While the 2023-2024 standard deduction is easy to claim, there are a few important things to keep in mind:

1. Income and retirement savings:

Keep track of your income levels and consider retirement contributions (like IRAs or 401(k)s) as these can also lower your taxable income.

doola’s financial tools can help you stay on top of these contributions.

2. Additional deductions:

Even if you take the standard deduction, there may still be other deductions and credits available, like the Child Tax Credit or deductions for business expenses.

doola’s expert advisors are here to guide you through all available options.

3. State taxes:

Don’t forget that your state tax deduction may differ from federal tax laws. Some states offer additional deductions, so make sure you’re aware of your state’s tax requirements.

doola can provide support to ensure you’re compliant with both federal and state tax laws.

Standard Deduction and Small Businesses: Match Made in doola?

If you run a small business, taxes are an inevitable part of your life.

And while you may be hyper-focused on building and growing your business, taxes can often feel like a mountain of paperwork and complexity.

That’s where the standard deduction can be a game-changer for many small business owners.

By utilizing the standard deduction, you can streamline the tax-filing process, allowing you to focus more on your business and less on the headache of itemizing receipts.

However, effective bookkeeping is equally essential.

doola’s comprehensive bookkeeping services keep your finances in order, so when tax season comes around, you’re ready to make the right call—whether that’s taking the standard deduction or itemizing your deductions for greater savings.

But wait! Did we just bring itemized deduction into the picture?

Looks like there’s a bit to learn about itemizing too if you want to make the smartest tax moves.

So, up next:

When should you itemize instead of taking the standard deduction?

Standard vs. Itemized Deduction: How to Choose?

When it comes to minimizing your tax bill, you’ve got two paths: the straightforward standard deduction or the detailed route of itemizing your deductions.

While the standard deduction offers a hassle-free way to reduce your taxable income—something about 90% of taxpayers prefer—itemizing can be a money-saver in certain situations.

Consider itemizing if:

a. You have substantial deductible expenses:

This could include large medical bills, significant mortgage interest, or charitable donations that exceed the standard deduction threshold.

b. You’re paying a lot in state and local taxes:

The cap for the state and local tax deduction (SALT) is $10,000.

But if your combined deductions—like mortgage interest, charitable contributions, and SALT—are higher than the standard deduction, itemizing could be worth it.

c. You run a business with multiple deductible expenses:

Small business owners with higher expenses for things like supplies, travel, and employee benefits may find that itemizing gives them a larger deduction.

Here are a few other scenarios where you must calculate an compare itemized tax deductions:

• Uninsured disaster losses

• High uninsured medical expenses

• Paying hefty property tax on a home

doola’s experts are ready to help you assess which option is better for you and ensure you’re not leaving any money on the table.

Example: Itemized vs. Standard Deduction

Let’s say you’re a married couple tackling your taxes and debating whether to take the standard deduction of $13,850 or itemize your deductions instead.

This year, you’ve just purchased a new home, and for the first time, you have mortgage interest and property taxes to consider.

After totaling up these expenses along with your generous charitable contributions, you discover that your itemized deductions amount to $15,500—an extra $1,650 over the standard deduction!

In this case, it’s definitely worth it to itemize your deductions, allowing you to keep an additional $1,650 tax-free.

However, remember that even with all these expenses, the standard deduction could still save you more in certain situations.

Not quite ready to dive into the complexities of tax law?

You don’t need to.

doola’s expert tax advisory team is here to help you navigate your options and determine whether itemizing is the best strategy for you.

Can doola Maximize Deductions?

Running a business is challenging enough—handling taxes shouldn’t add to the stress.

That’s where doola steps in, offering more than just bookkeeping services. We help you stay compliant, organized, and ready to take advantage of every deduction possible.

Our tax experts will walk you through each step of the tax process, helping you understand how the standard deduction fits into your unique financial situation.

We know that small business owners wear many hats, so our mission is to make managing your financial records and taxes as straightforward as possible.

From bookkeeping to tax filing assistance, we’ve got you covered.

All Set for Your Savings Season?

You read that right: Savings Season!

That’s what your tax season becomes once doola takes care of your financials.

With a solid understanding of the standard deduction and expert bookkeeping help from doola, you’ll be on your way to simplifying your tax return and potentially saving thousands.

Whether you’re sticking with the standard deduction or itemizing to squeeze out a little more savings, doola is here to make sure your financials are always in top shape.

Let us help you focus on what matters most—growing your business, not worrying about your tax bill.

Ready to streamline your bookkeeping and take the stress out of taxes?

Schedule a free consultation with doola today and find out how we can help you thrive this tax season and beyond!

FAQs

What happens if your standard deduction exceeds your income?

If your income is less than the standard deduction, your taxable income becomes zero, and you’re not required to file a federal return.

However, it’s still wise to file if you qualify for credits like the earned income tax credit, which could get you a refund even with no taxes owed.

What can I deduct with the standard deduction?

While the standard deduction prevents you from itemizing, you can still claim “above-the-line deductions” like student loan interest, traditional IRA contributions, and moving expenses (for armed forces).

How do I maximize my standard deduction?

Answer questions about your age, marital status, and household details accurately in your tax software to ensure you get the full deduction.

For paper forms, select the correct deduction based on your filing status and circumstances.