The Standard Deduction, Explained
The standard deduction is a fixed amount of income the tax code lets you exclude without proving anything. You take it or you itemise — whichever is larger — and the vast majority of filers take the standard amount.
How it works
The amount depends on your filing status, and it is subtracted from adjusted gross income to reach taxable income. Filers who are 65 or older or blind get an additional amount, claimed once per qualifying condition per person.
Because it comes off the top, the deduction is worth your marginal rate multiplied by the amount. The same deduction is therefore worth more in dollars to a higher earner — the opposite of how a credit behaves.
When itemising wins
Itemising only makes sense when qualifying expenses — mortgage interest, state and local taxes up to the cap, charitable contributions, large medical costs — add up to more than the standard amount.
Since the standard deduction was roughly doubled in 2018, the share of filers who itemise has fallen sharply. For most households the arithmetic no longer favours it.
State standard deductions are all over the place
Some states match the federal amount exactly. Some set their own, often far smaller. Several — Pennsylvania, New Jersey, Illinois, Massachusetts and Connecticut among them — offer none at all, using a personal exemption or a credit instead.
A missing standard deduction is not automatically bad news; what matters is the combination of base and rate. Compare the tax owed, which is what our tables show.