Standard deduction refers to a fixed dollar amount or a portion of an individual’s income that is not subject to tax, thereby reducing the taxable income of the taxpayer. The Internal Revenue Service (IRS) provides taxpayers with two options to reduce the total income to lower taxable income. Because of these deductions, taxable income and tax due are reduced. The standard deduction is one of these options given by the IRS. The other one is itemized deductions. Taxpayers must choose one of these two options, never both.
A standard deduction allows taxpayers to reduce their taxable income even if they do not have anything to itemize. Choosing standard deduction also takes away the need to document, record, and keep all expense receipts.
The standard deduction amount is based on different factors such as:
If you are disabled or blind
If you are claimed as a dependent on another person’s tax return
If you are married or a qualified widow or widower
Here are the standard deduction amounts in 2021:
For single taxpayers: $12,550
For married taxpayers filing separately: $12,550
For heads of households: $18,800
For married taxpayers filing jointly: $25,100
Can everyone use the standard deduction?
No, not all taxpayers are qualified to use the standard deduction. Certain taxpayers are not eligible to do so:
A person who is filing as married and filing separately cannot use standard deduction if their spouse is using itemized deductions;
A person who is filing a tax return for less than 12 months;
A person who was a nonresident alien or dual-status alien during the year unless that person is married to a U.S. citizen or resident alien at the end of the year and who chooses to be treated as U.S. residents for tax purposes;
And, an estate or trust, common trust fund, or partnership.
When can a taxpayer use the standard deduction?
Selecting whether to use a standard deduction or to itemize deductions depends on the taxpayers. Many people find that standard deduction is more convenient because they do not need to monitor all their expenses throughout the year and check which of these expenses qualify as deductions.
If you find that the standard deduction is more than your itemized deductions, you can save more money to choose the standard deduction. However, if the standard deduction is less than your itemized deductions, then you can select to itemize deductions.
Try out Workstream to hire employees for
A revolutionary hiring process for Hourly positions
A revolutionary hiring process for Hourly positions Hiring hourly staff in San Francisco can be a tough job. Workstream can help accelerate the process by letting you post on job boards like Indeed within seconds.
1-Click Job Posting
No more tedious copy and pasting. We integrate with all the top job boards. All applicants funnel into one intuitive dashboard.
Print out your unique QR code and text message number. Applicants scan/text to see all open positions and apply right away.
Automated & 2-Way SMS
Engage with applicants via text. Include links to screening questions, forms, and more. Use 2-way text to answer questions.
Connect Workstream to your calendar so applicants can schedule interviews. Streamline onboarding with background check & HR integrations.
Candidate Tracking & Scoring
View all your applicants and employees in one place. Make notes on their progress. Access their docs anytime from anywhere.
We provide templates for everything from job postings to offer letters. Send links to docs and tax forms via text message so new hires sign digital copies.
What other owners
think about hiring through Workstream
"Very user friendly. "
"Workstream created a platform where I can easily and quickly manage all aspects of recruiting."
Summit Wine Tastings
Currently hiring on Workstream for:
"Workstream has helped our onboarding to stay organized and efficient. I especially love the stage automations and the integrations with Checkr and numberous job boards. Great work!!"
Post a job for free!
Try Workstream for free to post a job.
Workstream is an all-in-one hiring & texting solution based in San Francisco. Join thousands of happy hiring managers. Call or text message us:(415) 767-1006