When filing your taxes, you'll need to decide between the standard deduction and the itemized deduction. Deductions help reduce the amount of income you're taxed on, so this choice can significantly impact your tax liability.
Standard Deduction
The standard deduction is a set amount by the IRS that is subtracted from your adjusted gross income (AGI) to reduce your taxable income. The standard deduction amount changes each year, with higher amounts for married couples filing jointly and less for single filers and heads of households.
Generally, the standard deduction provides the biggest tax break. The Standard deduction rates for 2024 tax year are listed below.
| Filing Status | Deduction |
| Single | $14,600 |
| Married filing separately | $14,600 |
| Married filing jointly | $29,200 |
| Head of Household | $21,900 |
You cannot take the standard deduction if:
- You are a married individual filing as married filing separately whose spouse itemizes deductions.
- You are an individual who files a tax return for a period of less than 12 months because of a change in your annual accounting period.
Itemized Deduction
Itemized deduction means listing each individual deduction you qualify for and taking that total amount off your taxable income. These include amounts you paid during the taxable year for state and local income or sales taxes, real property taxes, personal property taxes, mortgage interest, disaster losses, gifts to charities, and medical and dental expenses. However, each deduction is subject to certain dollar limitations.
According to the IRS, you should itemize your deductions if the total amount of your allowable itemized deductions is greater than your standard deduction or if you must itemize deductions because you can't use the standard deduction.
Choosing the right option for you
During the annual tax season, you will complete Heard's Tax Checklist, where you will answer questions regarding your business and any personal expenses regarding available deductions. With that information, we will match you with a Tax Preparer who will review and discuss your options.