2-minute Crash-course on the 2021 and 2022 Standard Deduction
It’s the second most wonderful time of the year: Tax season. You can just smell the paperwork. Hopefully we can help make your life a little easier by saving you from having to scroll through the IRS website to look for the updated standard deduction for 2021 and 2022 tax years.
Did you know that the IRS allows individuals who are age 65 or older or blind to take an additional standard deduction? If this applies to you or your spouse, be sure to check the appropriate boxes on your Form 1040.
What is the standard deduction?
You can claim deductions on your federal tax return in one of two ways. You can use the standard deduction or you can itemize your deductions.
The standard deduction is the dollar amount you’re allowed to take on your tax return to reduce your overall taxable income. The amount of the deduction is usually adjusted each year for inflation.
But not everyone may take the standard deduction. For example, taxpayers who choose to itemize their deduction (this is when you list and add up your eligible deductions one by one) cannot claim the standard deduction. The IRS also provides the following list of taxpayers who are not eligible:
- A married individual filing separately whose spouse itemizes deductions
- An individual who was a nonresident alien or dual status alien during the year (certain exceptions may apply)
- An individual who files a return for a period of less than 12 months due to a change in their annual accounting period
- An estate or trust, common trust fund, or partnership
Ask a professional
Typically, individuals choose the deduction method that provides the largest reduction to their taxable income. But taxes are complicated, and each person’s tax situation is different. Consult a tax professional and work with your Ayco coach to determine the best way to file your returns.
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United Capital Financial Advisers, LLC d/b/a Goldman Sachs Personal Financial Management (“GS PFM”) is a registered investment adviser and an affiliate of Goldman Sachs & Co. LLC and subsidiary of The Goldman Sachs Group, Inc., a worldwide, full-service investment banking, broker-dealer, asset management, and financial services organization.
The information contained herein is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered investment advice. GS PFM does not provide legal, tax, or accounting advice. Clients should obtain their own independent legal, tax, or accounting advice based on their particular circumstances. Please contact your financial adviser with questions about your specific needs and circumstances.
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