Recently, there’s been a lot of buzz around the standard deductions. The purpose of standard deduction is to reduce your taxable income. The standard deduction in 2018 increased to $12,000 for single filers and married filers filing separately, $24,000 for married filers who are filing jointly and $18,000 for household heads. The standard deduction for those who are over 65 or blind is $1,300 and it’s $16,000 higher if they are unmarried and not a surviving spouse. This increase in standard deduction is expected to simplify the annual tax compliance for individual taxpayers, particularly those which are not income-property or business owners.
Usually, taxpayers claim the standard deduction if their itemized deductions are less than the standard deduction. Itemized deductions comprise expenditures such as mortgage interest, state and local taxes, medical costs, and more.