Your tax bill is determined by your tax rate, tax credits and other factors that will affect how much you owe. This can translate into a lower income tax percentage on your return, potentially reducing the amount you pay when you calculate taxable income. You may drop into a lower tax bracket, depending on how much the standard deduction reduces your adjusted gross income (AGI). The standard tax deduction provides taxpayers a specific dollar amount of income they can subtract from their earned income on their federal tax return.īy using the standard deductions, a taxpayer could fall into a lower tax bracket and thus have a lower tax liability at the end of the year. The standard deductions for 20 are different, and your eligibility to take the standard deduction depends on factors unique to your finances.

The Internal Revenue Service (IRS) permits taxpayers to deduct this amount from their taxable income in lieu of having to itemize deductions.Īlthough the standard deduction seeks to simplify some of the complexities of your tax returns, a host of factors should be considered before choosing between deductions. Depending on your own financial situation, you may opt to take a standard deduction or an itemized deduction on your tax return.įor tax purposes, a standard deduction is the dollar amount that taxpayers can deduct from their income before income taxes are applied.Standard deduction figures are determined by the IRS based on the taxpayer's filing status and the tax year.The standard deduction is a set amount taxpayers can deduct from earned income on their taxes.

2021 tax brackets irs head of household