Instead | Standard deduction 2025 amounts for filing

The standard deduction is one of the most significant tax benefits available to individual taxpayers, reducing taxable income without requiring detailed expense documentation. For the 2025 tax year, the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, increased standard deduction amounts by approximately 7.9% from 2024 levels, providing enhanced tax relief for millions of Americans filing their returns in 2026.

Understanding the standard deduction amounts for your filing status directly impacts your tax savings strategy and determines whether you should itemize deductions or claim the standard amount. According to IRS Statistics of Income data, approximately 88% of taxpayers now claim the standard deduction rather than itemizing, a dramatic shift from the pre-2018 rate of 68%.

The OBBBA legislation created additional tax benefits for seniors, including a new $6,000 deduction available through 2028, further simplifying tax filing while providing targeted relief for older Americans. The act also raised the SALT deduction cap to $40,000 and restored a charitable deduction for non-itemizers, reshaping the standard deduction-versus-itemization decision for millions of filers.

2025 standard deduction amounts by filing status

The IRS has set the following standard deduction amounts for the 2025 tax year per IRS Publication 505, which taxpayers will use when filing their returns. These amounts represent significant increases from the 2024 tax year, combining inflation adjustments under Internal Revenue Code Section 63(c)(4) with legislative changes from OBBBA.

Complete the 2025 standard deduction table

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These amounts apply automatically to all eligible taxpayers unless they choose to itemize their deductions instead. The standard deduction reduces your taxable income, lowering the amount subject to federal taxation and potentially affecting your eligibility for various tax credits and benefits. For 2026, the IRS has announced further increases to $16,100 (single) and $32,200 (married filing jointly).

How much is the additional standard deduction for seniors over 65

Taxpayers who are 65 or older by December 31, 2025, receive a traditional additional standard deduction amount as specified in IRS Publication 501. Single or head of household filers who are 65 or older can add $2,000 to their standard deduction, while married taxpayers can add $1,600 per qualifying spouse. Blind taxpayers receive the exact additional amounts regardless of age.

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Under the IRS "Birthday Rule," if you turn 65 on January 1, 2026, the IRS considers you 65 for the entire 2025 tax year, meaning you must have been born on or before January 1, 1961, to qualify.

What is the new $6,000 OBBBA senior deduction for 2025

The One Big Beautiful Bill Act created an entirely new $6,000 deduction for seniors age 65 and older, available for tax years 2025 through 2028. This deduction is in addition to both the base standard deduction and the traditional additional amount for age or blindness described above.

Key features of the new senior deduction:

• Available to taxpayers age 65 or older by December 31, 2025, with a valid Social Security number
• Amount per qualifying individual is $6,000, or $12,000 if both spouses are 65+
• Available whether you itemize deductions or take the standard deduction
• Phases out beginning at $75,000 MAGI (single) or $150,000 MAGI (married filing jointly)
• Fully phased out at $175,000 MAGI (single) or $250,000 MAGI (married filing jointly)
• Phase-out rate reduces the deduction by $0.06 for every $1 over the threshold
• Not available to taxpayers who use the married filing separately status

Example calculation for a single filer age 65 with MAGI of $100,000 shows they are $25,000 over the $75,000 threshold. Their deduction reduces by $1,500 ($25,000 × $0.06), leaving them with a $4,500 senior deduction instead of the full $6,000.

Maximum 2025 standard deductions, including all provisions

When combining all three layers through the "triple stack" approach, eligible taxpayers can achieve substantial t

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The Health savings account strategy works alongside the standard deduction to provide additional tax advantages for medical expenses. HSA contributions also reduce your AGI, which can help preserve the full $6,000 senior deduction by keeping your MAGI below the phase-out threshold.

When should you itemize versus taking the standard deduction

The fundamental decision in preparing your tax return involves comparing your total itemized deductions with the standard deduction for your filing status. Taxpayers should itemize only when their qualifying expenses exceed the standard deduction, as itemizing requires substantially more documentation and year-round record-keeping on Schedule A (Form 1040).

Standard itemized deductions for 2025

1. State and local taxes (SALT) with the OBBBA cap raised from $10,000 to $40,000 for 2025-2029, phasing down for MAGI above $500,000 by 30% of the excess until reaching the $10,000 floor
2. Mortgage interest on acquisition debt up to $750,000 for homes purchased after December 15, 2017
3. Charitable contributions up to 60% of AGI for cash, plus OBBBA added a $1,000 deduction for non-itemizers ($2,000 for joint filers)
4. Medical expenses exceeding 7.5% of AGI per IRC Section 213
5. Casualty and theft losses from federally declared disasters only

Real-world itemization scenarios

Scenario 1 for a single homeowner in California with $9,000 in mortgage interest, $14,500 in SALT, and $3,000 in charitable contributions yields $26,500 in itemized deductions. Since this exceeds the $15,750 standard deduction by $10,750, this taxpayer should itemize.

Scenario 2 for a married couple, both age 66, with a paid-off home, shows $13,000 in SALT and $5,000 in charitable contributions, totaling just $18,000 in itemized deductions. Their standard deduction of $46,700 ($31,500 base + $3,200 age + $12,000 OBBBA) makes it the clear winner, saving $28,700 more than itemizing.

Scenario 3 for a self-employed individual with Home office expenses shows $22,000 in personal itemized deductions. In contrast, business expenses for home office, Vehicle expenses, and Meals deductions totaling $18,000 are deducted separately on Schedule C (Form 1040). Business owners can further leverage Travel expenses and Hiring kids to reduce taxable business income, separate from the deduction decision.

How does the charitable contribution bunching strategy work

Bunching charitable contributions into alternating years can push total itemized deductions above the standard deduction threshold in strategic years while taking the standard deduction in other years. A donor-advised fund allows taxpayers to make a significant contribution in one year, claim the itemized deduction, then distribute funds to charities over subsequent years.

Year 1 (2025) involves contributing $30,000 to a donor-advised fund, plus $10,000 SALT and $8,000 mortgage interest, totaling $48,000 in itemized deductions.

Year 2 (2026) involves $0 in charity, plus $10,000 in SALT and $7,500 in interest, totaling $17,500. Take the standard deduction plus a $1,000 non-itemizer charitable deduction.

Year 3 (2027) follows the same approach with the standard deduction

Three-year total deductions reach $79,500, versus $47,250 from the standard deduction only, yielding $32,250 in extra deductions, worth approximately $7,095 at the 22% marginal rate. The Tax loss harvesting strategy complements this approach by generating investment losses that offset capital gains regardless of deduction choices.

What are the standard deduction rules for dependents and tax planning

The Child and dependent tax credits provide valuable benefits that work alongside the standard deduction. For 2025, dependents who file their own returns receive a limited standard deduction equal to the greater of $1,350 or their earned income plus $450, up to the regular standard deduction per IRS Publication 501.

• Dependent students with scholarship income exceeding qualified education expenses may need to file returns.
• The "Kiddie Tax" on Form 8615 may apply when unearned income exceeds $2,700
• OBBBA permanently eliminates personal exemptions for dependents
• Family businesses can utilize Hiring kids to create income offset by the dependent standard deduction

Retirement contribution strategies using Traditional 401k plans reduce AGI before the standard deduction applies and can help seniors stay below the OBBBA senior deduction phase-out thresholds. Review your state-specific requirements using the 2026 California State Tax Deadlines or 2026 New York State Tax Deadlines pages for state-specific filing guidance, as state standard deductions often differ significantly from federal amounts. The Augusta rule provides tax-free rental income regardless of deduction decisions, while the Sell your home exclusion allows up to $250,000 ($500,000 married) of capital gains tax-free per IRS Publication 523.

Maximize your tax benefits with strategic deduction planning

Understanding the 2025 standard deduction amounts and how they interact with your specific financial situation forms the foundation of effective tax planning. The decision between standard and itemized deductions directly impacts your tax liability. It should be carefully evaluated each year based on your changing circumstances, particularly given the temporary OBBBA provisions available through 2028.

Instead's comprehensive tax platform automatically compares your potential itemized deductions against standard deduction amounts, ensuring you always select the approach that minimizes your tax liability while maintaining complete compliance with IRS requirements.

Instead's intelligent system seamlessly tracks deductible expenses throughout the year, provides real-time analysis of itemization benefits, and generates comprehensive tax reporting that simplifies filing while maximizing available deductions.

Transform your tax preparation experience with advanced technology that optimizes your standard deduction strategy while identifying additional tax savings opportunities across your entire financial picture. Explore our flexible pricing plans designed to deliver maximum value for your specific tax situation.

Frequently asked questions

Q: What is the standard deduction amount for single filers in 2025?

A: The standard deduction for single filers in 2025 is $15,750, a $1,150 increase (7.88%) from the 2024 amount of $14,600. Single filers 65 or older receive an additional $2,000 traditional amount, plus up to $6,000 from the new OBBBA senior deduction (subject to income phase-outs beginning at $75,000 MAGI), bringing the maximum total to $23,750.

Q: When should I itemize deductions instead of taking the standard deduction?

A: Itemize when your total qualifying expenses exceed the standard deduction for your filing status. For 2025, this means exceeding $15,750 for single filers or $31,500 for married couples filing jointly. The OBBBA's expanded $40,000 SALT cap may push upper-middle-income taxpayers in high-tax states back into itemizing for the first time since 2018.

Q: What is the new $6,000 senior deduction, and who qualifies?

A: The OBBBA created a $6,000 deduction for taxpayers age 65 or older, available for tax years 2025 through 2028. Married couples where both spouses are 65+ can claim $12,000. The deduction phases out for MAGI above $75,000 (single) or $150,000 (joint), eliminated at $175,000 or $250,000, respectively. It is available to both itemizers and non-itemizers, but not to married filing separately.

Q: Can I take the standard deduction federally and itemize on my state return?

A: This depends on your state's tax laws. California allows taxpayers to itemize on their state return while taking the federal standard deduction, which is advantageous given California's $5,363 state standard deduction versus $15,750 federally.

Q: How does the standard deduction affect my adjusted gross income?

A: The standard deduction reduces your taxable income but does not change your AGI. AGI is calculated before applying the standard deduction and determines eligibility for credits and benefits, including the $6,000 OBBBA senior deduction. Your AGI equals total income minus above-the-line adjustments, such as retirement contributions.

Q: What happens if my itemized deductions are close to the standard deduction?

A: If itemized deductions are only slightly higher (within $1,000-$1,500), weigh the documentation burden against the marginal benefit. Consider bunching strategies to exceed the threshold in alternating years. Seniors 65+ should factor in the $6,000 OBBBA deduction, which may make the standard deduction significantly more valuable.

Q: Can married couples filing separately both claim the standard deduction?

A: Yes, each spouse can claim $15,750 for 2025. However, if one spouse itemizes, the other must also itemize under IRC Section 63(c)(6)(A). Married filing separately filers cannot claim the $6,000 OBBBA senior deduction and are subject to a reduced $20,000 SALT cap.