A common question that CPAs like me hear every year is: “Should I take the standard deduction or itemize?” In today’s post, I’ll explain how the standard deduction works and clue you in on how you can decide if you should take the standard deduction or itemize instead.

What Is the Standard Deduction?

The standard deduction is a dollar amount that the IRS allows you to subtract from your taxable income. It’s the tax-free portion of your income, and if you qualify for it, you get it automatically as long as you don’t choose to itemize.

You don’t have to provide receipts, records, or proof of expenses in order to claim the standard deduction like you do with itemized deductions.

The standard deduction amount changes slightly each year to keep up with inflation, and the amount taxpayers can claim depends on their filing status. These are the standard deduction amounts for tax years 2024 and 2025:

Additionally, tax filers who are 65 or older and tax filers who are blind (either totally or partially blind) can claim a higher standard deduction.

For instance, for tax year 2025 (filing in 2026), the standard deduction for a married couple filing jointly where both spouses are over 65 would be $46,700:

• Base standard deduction for married filing jointly: $31,500
• Additional amount for age 65 (2 × $1,600): $3,200
• Additional deduction for seniors (2 × $6,000): $12,000

One other note here is that if you’re being claimed as a dependent by someone else, your standard deduction will be based on your earned income. The way this usually works is that you can either take a flat amount or however much your earned income was plus a smaller amount.

For instance, for tax year 2025, you can either take a standard deduction of $1,350, or you can add $450 to whatever your earned income amount was, and take the sum of those 2 numbers as your standard deduction.

Who Qualifies for a Standard Deduction?

Most people qualify for the standard deduction, but there are exceptions. You generally cannot take the standard deduction if:

• You are a nonresident or a dual-status alien (there are special rules if you’re married to a U.S. citizen or resident).
• You are filing a return for an estate or trust, or for a common trust fund.
• You file a tax return for less than 12 months because of a change in your accounting period.
• You are itemizing your deductions or you are married but filing separately and your separated spouse is itemizing (in that case, you have to itemize too).

For just about everyone else, including individuals, married couples, and heads of household, the standard deduction is available and applied automatically unless you choose to itemize.

How Does the Standard Deduction Lower Your Tax Bill?

Here’s a simple explanation of how the standard deduction works.

Let’s say you’re a single filer with $60,000 in gross income in 2025. If you take the standard deduction of $15,750, your taxable income becomes $44,250 ($60,000 − $15,750).

This means you’ll only pay federal income tax on $44,250 and not the full $60,000 of income. That can be a big difference, especially since the first several thousand dollars of income are taxed at lower rates. You can read more about how tax brackets work here.

What Does It Mean to Itemize Deductions?

Instead of taking the standard deduction, you can choose to itemize your deductions. This means listing out specific deductible expenses on your Form 1040, Schedule A. Examples include:

• Mortgage interest paid on your home
• State and local taxes (up to $10,000 total, including property tax)
• Charitable donations (including stock donations)
• Medical expenses that exceed 7.5% of your adjusted gross income
• Casualty or theft losses from federally declared disasters (IRS disaster relief info)

Should I Take the Standard Deduction or Itemize?

For most taxpayers, the Tax Cuts and Jobs Act (TCJA) of 2017 made the standard deduction so high that itemizing is much less common. In fact, the Tax Policy Center estimated that only around 10% of taxpayers itemized in 2022.

However, there are situations where itemizing will lower your tax bill more than taking the standard deduction, so you should take whichever route gives you the larger total deduction. You might benefit from itemizing if:

• You have a large mortgage or high property taxes.
• You make significant charitable contributions.
• You have high out-of-pocket medical expenses.
• You live in a state with high income or sales taxes.
• You experienced a major casualty loss from a federally declared disaster.

Can you switch back and forth between taking the standard deduction and itemizing?

Yes! You can decide each tax year which way is better for you and your tax bill.

Abridged by Amy

The standard deduction simplifies tax filing, saves you from recordkeeping headaches, and typically provides you with a larger deduction than itemizing. But not always!

If you have significant deductible expenses, then it will pay off to figure out if you should take the standard deduction or itemize. A CPA can easily run these numbers for you and help you keep more of your hard-earned money in your bank account, so make sure to reach out to an experienced accountant if you have questions or need help with the comparison.