Standard deduction amounts increase for 2025 tax year

Photo: Investment Zen via Flickr

Deductions can help reduce your taxable income. The less money subject to taxes, the small your annual bill to Uncle Sam.

Some people get the most advantageous deduction amount by itemizing. Most of us, however, claim the standard deduction, especially after the Tax Cuts and Jobs Act of 2017 dramatically increased those amounts.

Even better, every year the standard deductions amounts — there are several because the amounts depend on your filing status — get reviewed by the Internal Revenue Service. That usually leads to at least some hike in the standard deduction amounts.

Best of all, the amounts are easy to find. They’re at the bottom of the first page of Form 1040. Sorry about adding yet another tax year into the mix, but that's the 2023 individual return shown below, since the IRS hasn't finalized the 2024 form yet.

See more tax forms and more about them at Tax Forms 2024.

This Part 2 of the ol’ blog’s annual 10-part inflation series that looks at the 2025 standard deduction amounts, and more.

Standard deduction amounts: For filers who claim the standard deduction in tax year 2025, single taxpayers and married individuals who file separate returns will get to claim $15,000 to get to their taxable income amount. That’s an increase of $400 from 2024's standard deduction for these filers.

Married couples filing jointly will see their standard deduction rise to $30,000. That’s $800  more than for the 2024 tax year 2024.

Heads of households’ standard deduction will be $22,500 for tax year 2025, an increase of $600 from the amount for tax year 2024.

At the risk of being repetitive (and because I like tables), below is a comparison of this year's 2024 standard deduction amounts and those that will be available in 2025. Again, note the dates, that is the tax years, to which these amounts apply.
    

    
Age adds to deductions: The standard deduction amounts shown above apply to most taxpayers younger than 65.  

The age distinction is important because the tax code allows older filers and those who are visually impaired to claim additional standard deduction amounts. And you can do so simply by ticking a checkbox on your tax return.

Each added standard deduction amount option is separate for each filer, meaning that an older married couple could check up to four boxes on their joint return. The total number of boxes checked then is used to determine the filer(s) standard deduction amount.

For the 2025 tax year, filers age 65 or older and/or legally blind taxpayers who file joint returns or are surviving spouses get an additional standard deduction amount. It will be $1,600 for each qualifying circumstance. That's $50 more than the $1,550 allowed on 2024 returns.

The additional standard deduction amount in age/vision situations is increased next year to $2,000 if the individual is also unmarried and not a surviving spouse. That’s also a $50 increase of the $1,950 allowed this tax year.

And if you're a tax filer who also can be claimed as a dependent on another filer's tax return, in 2025 your standard deduction amount cannot be more than the greater of either $1,350 or the sum of $450 and the dependent filer's earned income. On 2024 returns, a dependent's standard deduction amount cannot be more than the greater of either $1,300 or the sum of $450 plus your earned income.

Itemized deduction issues: A key component of annual tax planning is determining whether you'd be better off claiming the standard deduction or itemizing all your allowable tax expenses on Schedule A.

The TCJA changes made the standard deduction choice a no-brainer for tens of thousands or filers. But not all.

And don't just assume that taking the standard route is the best tax deduction map to follow. You know that old tax saying: Assuming can get your a$$ kicked by the IRS in the form of a higher tax bill.

OK, maybe that's just my personal old tax saying, but you get the idea. Double check your deduction choice so that you don't cheat yourself at filing time.

Basically, and even the IRS says this, you always want to use the deduction method that gives you the larger amount to offset your income. If that’s itemizing, then you should do the extra work to get a better tax deduction result.

Not, too, that you're not locked into any one deduction method. It's a decision you make each tax year. One year, itemizing might be better. The next year, it's wiser to take the standard deduction.

Knowing what's available on the standard side gives you a baseline to use in measuring your potential itemized expenses.

For some folks, even under the new tax law, their total itemized deduction amount will still be more than their standard deduction amount. In these cases, by all means itemize. You can find more claim opportunities in my post on maximizing itemized deductions.

Exemptions, sorta, still around: The once-popular tax reduction option of claiming personal exemptions was eliminated, at least through 2025, by the Tax Cuts and Jobs Act.

Exemptions were a specific dollar amount, adjusted annually for inflation, that taxpayers could claim for themselves, their spouses if filing jointly and dependents. The total exemptions helped reduce the amount of filers' income subject to tax.

TCJA supporters say the exemption elimination isn't a big deal, although some filers with larger families disagree. The exemption loss is offset, they argue, by the previously discussed larger standard deduction amounts, as well as tax reform's larger child tax credit and the credit for other, non-child dependents.

Sometimes, though, tax laws use the personal exemption amount to calculate whether a filer can claim another tax benefit and/or how much of such a tax break. Doing away with the personal exemption amount would effectively invalidate those tax laws.

But that wasn't the intent of the TCJA's exemption erasure. So the IRS continues to calculate the now officially zero exemption amount based on pre-2017 exemption data.

A common situation where the exemption amount matters is when a taxpayer wants to claim a tax break for a qualifying relative. For the 2024 tax year, the IRS' so-called deemed exemption amount, based on a gross income limitation, is $5,200. That's $150 more than the $5,050 exemption in 2024.

More inflation info on the way: That wraps up this second part of the annual inflation series. Sorry for so many numbers when the focus was on a tax deduction that's supposed to be simple and easy. But that’s not uncommon when comes to taxes.

And speaking of numbers, the continuation of the annual 10-part tax inflation series normally would focus on retirement and pension amounts that change/increase the next tax year. But as I type, the IRS has yet to release those figures.

So tomorrow’s third installment will be a surprise! See you then.

The box below notes, and links to the inflation series’ Part 1, where you’ll find the full directory to all 10 parts. Thanks for reading this one.

And thanks especially for your tax inflation interest and explanation patience!

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