90% of people use the standard deduction to lower their taxable income, IRS stats say.
The standard deduction is a major way most Americans reduce their taxable income each year — and with inflation’s burn, the deduction’s amount will jump higher in 2024.
Last year, the standard deduction, tax brackets and other indexed tax provisions increased approximately 7% for 2023 income tax returns. That was the largest one-year adjustment in decades, according to Robert McClelland, senior fellow at the Tax Policy Center. For people filing as “head of household,” the amount climbs to $21,900, up from $20,800. That’s a nearly 5.3% increase.The standard deduction’s amount matters to many taxpayers, because it’s the way most people shrink their federal tax liability.
Choosing between the standard deduction and an itemized deduction boils down to the question which route will offer the larger deduction.That will be a big year for taxes because it’s the final year for many rules that went into effect under the Tax Cuts and Jobs Act of 2017.
Standard Deduction Taxable Income Inflation IRS 2024 Income Tax Returns
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