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Understanding the Standard Deduction for 2024
What Is the Standard Deduction for 2024?
The standard deduction is a preset amount you can subtract from your adjusted gross income to reduce your taxable income and tax bill. For the 2024 tax year, the IRS has increased the standard deductions by approximately 5% over 2023 levels. These increases will affect your taxes when you file in 2025.
Here are the new standard deductions for 2024:
- Single and Married Filing Separately: $14,600
- Head of Household: $21,900
- Married Filing Jointly: $29,200
How Does the Standard Deduction Work?
The standard deduction allows you to exclude a set amount of money from your taxable income. This deduction varies based on your filing status. Here are some key points:
- You can’t itemize: If you claim the standard deduction, you cannot claim individual itemized deductions like mortgage interest or charity donations.
- Tax filing is simpler: Standard deductions don’t require calculations or documentation. You simply find your deduction by filing status and plug it in.
- Standard deductions are generous: The standard deduction effectively makes a portion of your income tax-free.
- Additional deduction for seniors or blind individuals: In 2024, you may take an additional standard deduction if you are 65 or older or blind.
How Much Can I Save With the New Standard Deduction?
Single taxpayers can expect to save up to $277, and married couples up to $555, based on the increased standard deductions for 2024. Your actual tax savings will vary based on your filing status, tax bracket, and any changes to your income.
Here are potential savings for single filers in 2024:
| Rate | Tax Bracket | Potential Savings |
|---|---|---|
| 10% | $0 to $11,600 | Up to $75 |
| 12% | $11,601 to $47,150 | Up to $90 |
| 22% | $47,151 to $100,525 | Up to $165 |
| 24% | $100,526 to $191,950 | Up to $180 |
| 32% | $191,951 to $243,725 | Up to $240 |
| 35% | $243,726 to $609,350 | Up to $262.50 |
| 37% | Over $609,350 | Up to $277.50 |
When Should You Claim the Standard Deduction?
Choose the standard deduction when your itemized deductions don’t add up to more than the standard deduction amount. Common itemized deductions include mortgage interest, medical expenses, state and local taxes, and charity donations. If your deductions are low, the standard deduction is an easy choice.
When Should You Itemize?
If you have enough deductions to outweigh the standard deduction, itemize. You’ll need to track and document your expenses and ensure you meet any IRS requirements. Itemizing requires more work, but the tax savings can be worth it.
Who Can’t Claim the Standard Deduction?
In some cases, taxpayers aren’t eligible to claim the standard deduction. You must itemize if:
- You’re married filing separately and your spouse itemizes their deductions.
- You were a nonresident alien or dual-status alien during the tax year.
- You’re filing a return for a period of less than 12 months due to a change in your annual accounting period.
- You are filing as an estate or trust, common trust fund, or partnership.
The Bottom Line
The new standard deductions for 2024 will affect your final tax bill when you file in 2025. Adjustments for inflation should help bring standard deductions in line with the changing cost of living. If you need assistance with your mortgage or financial planning, contact O1ne Mortgage at 213-732-3074. Our experts are here to help you navigate your mortgage needs and maximize your savings.
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