Standard Deduction 2021

Standard Deduction 2021 – Preparing your taxes in advance allows you to make more informed decisions about how you will spend your savings. The standard tax deduction, which is provided by the federal government, is one of the most significant considerations when determining tax liability.

Standard Deduction 2021

What is Standard Deduction 2021?

The Standard Deduction 2021 is a fixed amount of money that reduces the amount of income for which you are responsible for paying tax in 2021. Your standard deduction is made up of the following components:

  1. It is dependent on your filing status that you get your basic standard tax deduction.
  2. You may be entitled to an additional deduction depending on your particular circumstances, such as your age or disability.

It varies between each people due to the variables such as their filling status, senior citizen age, blindness disability, and if they are claimed by another taxpayer as a dependent. Each year, the amount of standard deduction is also adjusted based on inflation.

The Standard Deduction 2021 is one of the main options to gain deductions by the Internal Revenue Service (IRS). However, it’s possible that someone is unable to claim it, in case they’re receiving other forms of deductions.

What is The Standard Deduction Used for?

The initial and essential purpose of the Standard Deduction 2021 is to lower the burden of middle to low-class citizens. However, it’s also aimed to make the taxpaying process simpler.

Taxing is a complex system, considering things such as itemized deductions for investment spending and medical expenses. That’s why in 1944, Congress chose to set a standard deduction that determines the flat amount of deduction despite how low the income was, but in a form of a percentage. In 1968 under President Ronald Reagan, the deduction system was changed to a flat amount in form of dollars until now.

Itemized or Standard Deduction?

There are two kinds of deductions: standard or itemized. You may choose either one, but not both. Itemized deduction is an option that lets you list all the expenses that may reduce your tax, such as medical expenses, property tax, charity donations, mortgage interest, etc. The decision to choose between both must be based on the calculation to keep your tax liability as low as possible.

Standard Deduction 2021

  • Standard Deduction 2021 for Single

The amount of Standard Deduction 2021 for a single individual or unmarried taxpayer is set at $12,550.

  • Standard Deduction 2021 for Married Filing Jointly

The amount of Standard Deduction 2021 for married taxpayers who fill in a join is set at $25,100.

  • Standard Deduction 2021 for Married Filing Separately

The amount of Standard Deduction 2021 for married taxpayers who fill in separate is set at $12,550.

  • Standard Deduction 2021 for Head of Household

The amount Standard Deduction 2021 for a head of household is set at $18,800.

  • Standard Deduction 2021 for Seniors or Over 65 Age

Senior citizens (those who are 65 years old and older) or individuals who have blindness disabilities are entitled to receive an additional amount of standard deduction. So, the total tax deduction they received is a standard deduction of their original filing status and the additional figure.

The additional amount of standard deduction in 2021 for married senior citizens is set at $1,350; meanwhile, it is set at $1,700 for single/unmarried senior citizens.

  • Standard Deduction 2021 for Dependents

To be a dependent, an individual must pass the test given by the IRS to establish their eligibility for the claim. The amount Standard Deduction 2021 for someone who is claimed as another person’s dependent cannot be more than $1,100 or the total of the taxpayer’s income plus $350, as the figure is not more than the basic amount of standard deduction.

Conclusion

Each year, the amount of standard deduction is raised bit by bit due to some factors such as inflation. A high leap is possible in some scenarios, for example, due to the TCJA (Tax Cuts and Jobs Act) being passed last year that contains regulation to increase the amount of deduction and make a great difference for individuals as taxpayers. Here is the table that summarized the amount of Standard Deduction 2021 based on filing status:

2018 2019 2020 2021
Single $12,000 $12,200 $12,400 $12,550
Married Filing Jointly $24,000 $24,400 $24,800 $25,100
Married Filing Separately $12,000 $12,200 $12,400 $12,550
Head of Household $18,000 $18,350 $18,650 $18,800
Over 65 Age
  • Single or Head of Household over 65 age: Additional $1,600
  • Married over 65 age: Additional $1,300
  • Single or Head of Household over 65 age: Additional $1,650
  • Married over 65 age: Additional $1,300
  • Single or Head of Household over 65 age: Additional $1,650
  • Married over 65 age: Additional $1,300
  • Single or Head of Household over 65 age: Additional $1,700
  • Married over 65 age: Additional $1,350
Dependents Additional $1,050 or individual income plus $350 Additional $1,100 or individual income plus $350 Additional $1,100 or individual income plus $350 Additional $1,100 or individual income plus $350

Note that the projection above is only a prediction based on inflation adjustment. You may use it as a rough estimation guide to establishing early tax calculation, regarding your own Standard Deduction 2021 as an individual with certain filling status.

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