Why it matters
The standard deduction is the default for most individual clients because it is simpler and often larger than the itemized total. It changes with the tax year, so the preparer should confirm the current amount before estimating a refund.
Example
A single filer has $60,000 of income and no large itemized deductions. The preparer subtracts the standard deduction for the filing status, then calculates tax on the remaining taxable income.
Related terms
Questions about Standard deduction
Should a client take the standard deduction or itemize?
Compare the standard deduction with the total itemized deductions. A client with a large mortgage interest, state tax or charitable total may benefit from itemizing, but the standard deduction is often larger.
Does the standard deduction change every year?
Yes. The amount is adjusted for inflation and can change with legislation. Confirm the amount for the tax year before preparing or estimating a return.