Great idea, I didn’t know that this opportunity existed!
For those like me who don’t know what a ‘standard deduction’ is in the US tax system, here’s a brief explanation:
Even if you have no other qualifying deductions or tax credits, the IRS lets you take the standard deduction on a no-questions-asked basis. The standard deduction reduces the amount of income you have to pay taxes on.
You can either take the standard deduction or itemize on your tax return — you can’t do both. Itemized deductions are basically expenses allowed by the IRS that can decrease your taxable income.
Taking the standard deduction means you can’t deduct home mortgage interest or take the many other popular tax deductions — medical expenses or charitable donations, for example.
In 2020 the standard deduction is $12,400 for single filers and married filers filing separately, $24,800 for married filers filing jointly and $18,650 for heads of household.
Great idea, I didn’t know that this opportunity existed!
For those like me who don’t know what a ‘standard deduction’ is in the US tax system, here’s a brief explanation: