Most people have mixed feelings about taxes. You want to pay as little tax as you can get away with. But you also want to keep things simple. Spending hours to claim a tax break that only saves you a few bucks isn't worth it for most taxpayers.
That's what makes the standard deduction so appealing. It's a massive break that can cut thousands of dollars off your tax bill. It also saves you from the hassle of itemizing your deductions, keeping track of deductible expenses throughout the entire year. Historically, roughly 70% of taxpayers took advantage of the standard deduction, and that number's likely to rise once 2018 tax returns come in.
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Nearly every year, changes get made to the standard deduction. For 2019, the adjustments aren't nearly as large as they were last year, when tax reform completely revamped the way the standard deduction and other common tax breaks worked. However, taxpayers can still expect to get some incremental boosts to their standard deductions when it comes time to do their 2019 taxes.
Here's how standard deductions changed for 2019
The increase in the standard deduction for 2019 was limited to the usual annual inflation adjustments that have taken place nearly every year. That resulted in modest but still noteworthy boosts from 2018 levels.
|
Filing Status |
Standard Deduction for 2019 Tax Year |
Change From 2018 |
|---|---|---|
|
Single |
$12,200 |
+$200 |
|
Married filing jointly |
$24,400 |
+$400 |
|
Head of household |
$18,350 |
+$350 |
|
Married filing separately |
$12,200 |
+$200 |
Source: IRS.
A higher standard deduction is available for certain taxpayers. If you're 65 or older or are blind, then you can add $1,300 to your standard deduction if you're married or $1,650 if you're single. If you're 65 or older and blind, then you can get double the amount, and the test applies separately to each spouse, meaning that married couples can claim up to four $1,300 boosts if both conditions apply to both spouses. The $1,300 amount is the same as in 2018, but the $1,650 is up $50 from last year.
If you're eligible to be claimed as a dependent, however, lower standard deductions apply. You always get at least $1,100 -- $50 higher than in 2018 -- but if you have earned income from a job or other source, then your standard deduction is equal to your earned income plus $350, up to the standard deduction in the table above.
Reaching a new equilibrium
With inflation adjustments being the only change to the standard deduction in 2019, it's likely that roughly the same number of people will choose to take it as did in 2018. However, it was 2018 that made a big difference for the decision-making process, because the near-doubling of most standard deduction amounts made it not worth it for millions of taxpayers who had previously itemized their deductions to keep doing so.
Also, there weren't any big changes to the tax laws applying in 2019 that further limited the ability to take certain itemized deductions. Tax reform's move to curtail state and local tax deductions to a $10,000 per year maximum reined in the ability of many taxpayers to benefit from itemizing, especially in high-tax states. As a result, more taxpayers just took the standard deduction, and that's likely to remain the case for the foreseeable future.
Make the right move
Of course, if you can save money by itemizing your deductions, then it still makes sense to do so, regardless of how high the standard deduction goes. But as the amount of the standard deduction goes up, more people will find that going to the extra work of keeping track of deductible expenses throughout the year just won't pay off -- and more will give up on itemizing in favor of just taking the easy way out.
