Comparing Standard vs. Itemized Deductions
When you claim a standard deduction, it allows you to deduct a set amount of money from your
taxes. And when you claim itemized deductions, you lower your income from a list of qualifying
expenses that were approved by the IRS. Taxpayers usually claim the option that lowers their tax
bill the most.

Tax codes issued in December 2017 lowered individual tax rates, raised standard deductions, and
lowered the deduction threshold for medical expenses, among other changes.

The table below breaks down standard deductions by filing status and compares the tax years
2017 vs. 2022 and 2023.

Standard Deductions

       Filing Status                         Tax Year 2017       Tax Year 2022        Tax Year 2023

Single Taxpayers/Married
Individuals Filing Separately            $  6,350                  $12,950                 $13,850

Married Couples Filing Jointly          $12,700                  $25,900                 $27,700

Heads of Household                         $  9,350                  $19,400                 $20,800

 

As you can read above, the standard deduction for single taxpayers and married individuals filing
separately has increased from $6,350 in 2017 to $13,850 in 2023. It went from $12,700 in 2017
to $27,700 in 2023 for married couples filing jointly and gone from $9,350 in 2017 to $20,800 in
2023 for heads of households.

However, tax changes eliminated the $4,050 personal exemption that you could claim for
yourself and each of your household dependents in 2017, which made itemizing tax deductions
less beneficial for many taxpayers, including large families. The Tax Cut and Jobs Act
eliminated the personal exemption for tax years 2018 through 2025.

So, as an example, if you’re a single filer with $10,000 worth of deductions, itemizing on your
2022 taxes won’t save you anything because the personal exemption is no longer available and
the standard deduction is higher.

What It Means to Itemize Deductions
When you itemize deductions, you are listing expenses that will later be subtracted from
your adjusted gross income to reduce your taxable income. If your expenses throughout the year
were more than the value of the standard deduction, itemizing is a useful strategy to maximize
your tax benefits.

Keep in mind that not all expenses qualify when you itemize. Itemized deductions include
products, services, or contributions that have been approved by the IRS. If you aren’t familiar
with which expenses you can deduct, you may want to read a guide to itemized deductions. In
brief, things you can deduct include:


• Medical and dental expenses

•  Certain state and local taxes, including sales taxes and property taxes

•  Mortgage loan points and interest

•  Investment interest

•  Charitable donations

•  Tax preparation fees

•  Unreimbursed employee expenses

•  Business expenses, including some for travel

•  Casualty, disaster and theft losses

Itemized deductions are called below-the-line deductions because they are subtracted from your
adjusted gross income. So it’s worth noting that you can claim above-the-line deductions like
IRA contributions without itemizing.

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