A tax deduction is an expense the IRS allows you to subtract from your income before taxes are calculated.
Lower taxable income = less tax owed.
Lower taxable income = less tax owed.
Types of Tax Deductions
1. Standard Deduction
A set dollar amount that reduces the income you’re taxed on.
Most people take the standard deduction because it’s easy and often larger than itemizing.
2025 Standard Deduction Amounts (Amounts can change slightly each year)
- Single: $14,600
- Married Filing Jointly: $29,200
- Head of Household: $21,900
2026 Standard Deduction Amounts
| Filing Status | Standard Deduction |
|---|---|
| Single | $16,100 |
| Married Filing Jointly | $32,200 |
| Married Filing Separately | $16,100 |
| Head of Household | $24,150 |
| Qualifying Surviving Spouse | $32,200 |
Additional Standard Deduction for Age or Blindness
For 2026, taxpayers who are 65 or older or blind may qualify for an additional standard deduction:
- $2,000 for Single and Head of Household filers
- $1,600 for Married Filing Jointly, Married Filing Separately, and Qualifying Surviving Spouse filers
These amounts apply for each qualifying condition (age 65 or older and/or blindness).
2. Itemized Deductions
Instead of the standard deduction, you can list certain expenses if they add up to more than the standard deduction.
Common itemized deductions include:
- Medical and dental expenses (only the amount over 7.5% of AGI)
- State and local taxes (SALT) — limited to $10,000
- Mortgage interest
- Charitable donations
- Casualty or theft losses (from federally declared disasters)
Itemized deductions are reported on Schedule A.
3. Above‑the‑Line Deductions
These deductions lower your Adjusted Gross Income (AGI) and can be taken even if you use the standard deduction.
Common examples:
- Educator expenses
- Student loan interest
- Traditional IRA contributions
- Deductible part of self‑employment tax
- Health Savings Account (HSA) contributions
These are reported directly on Form 1040.
How Deductions Affect Your Taxes
- Gross Income
→ subtract Above‑the‑Line Deductions
→ get AGI - AGI
→ subtract Standard or Itemized Deduction
→ get Taxable Income - Taxable Income
→ apply tax rates
→ calculate tax owed
TY 2025 Example
You’re single and earned $60,000.
You take the standard deduction of $14,600.
Taxable Income
$60,000 − $14,600 = $45,400
You pay tax on $45,400, not the full $60,000.
TY 2026 Example
A single taxpayer earns $60,000 and takes the 2026 standard deduction of $16,100.
Taxable Income
$60,000 − $16,100 = $43,900
The taxpayer pays tax on $43,900, not the full $60,000.