Tax Deduction
Standard Deductions for 2025 Tax Returns, and Extra Benefits for People Over 65
Each year when you fill out your federal income tax return, you can either take the standard deduction or itemize deductions to reduce your taxable income. The overwhelming majority of taxpayers claim the standard deduction, because due to changes in tax law, few people find it worthwhile to itemize anymore. Standard deduction amounts were bulked up by a major tax overhaul in 2017 and in recent years the IRS has made them even bigger, amid the highest inflation in decades.
Standard Deduction: Single, Married and Head of Household
The IRS announced inflated-adjusted numbers for the 2025 standard deduction amounts in 2024 under Revenue Procedure 2024-40. However, as part of the One Big Beautiful Bill Act, the standard deduction amount increased to $31,500 for married couples filing jointly. For single taxpayers and married individuals filing separately, the standard deduction for 2025 is $15,750, and for heads of households, the standard deduction is $23,625.
The size of your standard deduction depends largely on your tax filing status. Besides your tax filing status, other factors used to calculate your standard deduction include your age, whether you’re blind and whether another taxpayer can claim you as a dependent.
Standard Deduction 2025 (Returns Due April 2026)
Standard Deduction Amounts (Revised)
2025 Official Tax Adjustments
| Filing Status | Standard Deduction Amount |
|---|---|
| Single | $15,750 |
| Married Filing Jointly & Surviving Spouses | $31,500 |
| Married Filing Separately | $15,750 |
| Heads of Household | $23,625 |
Additional Standard Deduction for People Over 65
For 2025, the additional standard deduction amount for the aged or the blind is $1,600. The additional standard deduction amount increases to $2,000 for unmarried taxpayers.
For 2025, the standard deduction amount for an individual who may be claimed as a dependent by another taxpayer cannot exceed the greater of $1,350 or the sum of $450 and the individual’s earned income (not to exceed the regular standard deduction amount).
Child-Related Adjustments
The kiddie tax applies to unearned income for children under the age of 19 and college students under the age of 24. Unearned income is income from sources other than wages and salary, like dividends and interest.
Your child must pay taxes on their unearned income in 2025, but if that amount is more than $1,350 but less than $13,500, you may be able to elect to include that income on your return rather than file a separate return for your child.
The same “regular” rules apply to earned income.
Section 199A (Qualified Business Income) Deduction
As part of the 2017 tax reform law, sole proprietors and owners of pass-through businesses like LLCs, S corporations, and partnerships may be eligible for a deduction of up to 20% to lower the tax rate for qualified business income. The deduction is subject to threshold and phased-in amounts. For 2025, the threshold amounts begin at $394,600 for married taxpayers filing jointly.
Section 199A Amounts
2025 Official Tax Adjustments
| Filing Status | Threshold Amount | Phased-In Amount |
|---|---|---|
| Married Filing Jointly | $394,600 | $494,600 |
| Married Filing Separately | $197,300 | $247,300 |
| All Other Taxpayers | $197,300 | $247,300 |
Foreign-Earned Income Exclusion
In 2025, the foreign-earned income exclusion amount is $130,000, up from $126,500 in tax year 2024.
Federal Estate & Gift Tax
The federal estate tax exclusion for decedents dying will increase to $13,990,000 per person (up from $13,610,000 in 2024) or $27,980,000 per married couple in 2025. (The exclusion could take a dip in 2026 if Congress allows it to sunset to pre-TCJA values.)
The federal gift tax exclusion will increase to $19,000 in 2025, up from $18,000 in 2024. That means you can gift $19,000 per person to as many people as you want with no federal gift tax consequences in 2025; if you split gifts with your spouse, that total is $38,000. If your spouse is not a U.S. citizen, tax-free gifts are limited to present interest gifts whose total value is below the annual exclusion amount, which is $190,000 in 2025 (it was $185,000 in 2024).
Itemized Deductions
Itemized deductions found on Schedule A have largely not changed, except for the SALT caps. Here’s a refresher on some of the most common:
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Medical and Dental Expenses:
The “floor” for medical and dental expenses is 7.5% in 2025, which means you can only deduct those expenses which exceed 7.5% of your AGI. -
State and Local Taxes:
Deductions for state and local sales, income, and property taxes remain in place and are limited to a combined total of $40,000, or $20,000 for married taxpayers filing separately. This reflects changes under OBBBA. -
Home Mortgage Interest:
You may only deduct interest on acquisition indebtedness—your mortgage used to buy, build or improve your home—up to $750,000, or $375,000 for married taxpayers filing separately. Charitable Donations. As a result of tax reform, the percentage limit for charitable cash donations to public charities increased from 50% to 60% in 2018 and will remain at 60% for 2025. -
Casualty and Theft Losses:
The deduction for personal casualty and theft losses has been repealed except for losses attributable to a federal disaster area. -
Job Expenses and Miscellaneous Deductions subject to 2% floor:
Miscellaneous deductions, including unreimbursed employee expenses and tax preparation expenses, which exceed 2% of your AGI have been eliminated.
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